WARREN, Ohio – Should you take a large business deduction as a lump sum or stretch it out over the next year or longer as your small business grows?

Taxpayers, including small business owners, are leaving a lot of money behind. Barb Cibella, owner of Black Cat Tax in Champion, says she looks at the past three years of tax delinquencies and makes suggestions that business owners should consider when investing in their own business.

Cibella, a licensed agent with experience working with the IRS and business owners, spoke Thursday as part of 717 Credit Union’s Business Accelerator program at the Chophouse in Warren and gave small business owners and entrepreneurs some tips and strategies to keep their books in order.

From her favorite accounting software for small businesses to suggestions on when to deduct large purchases, Cibella shared advice for anyone already running a business or looking to take their idea to the next level.

For example, one sign that it’s time to switch from a sole proprietorship to an S corporation might be the amount a business takes in after expenses. Anyone making $40,000 to $45,000 should consider switching, Cibella said. That means applying to the IRS to allow the business to change its designation. For someone who has been a sole proprietor for a few years, there is a window of opportunity to file their tax return early in the year, before March 15.

The business owner does not have to pay self-employment taxes because he is now paid as an employee of the company.

Cibella said purchasing large equipment is best done in the first three quarters of the year when the owner wants to take depreciation.

Cibella also suggested using a logbook or one of the newer apps to record mileage, which would stand up in an audit.

Cibella said the IRS is sometimes more than two years behind on its audits, so business owners should be sure to scan or photograph their receipts. Many receipts fade from exposure to air.

She also suggested using a single credit card for the business, as this would make it easier to manage expenses in one place.

Cibella said that while dealing with the IRS can be difficult, the state of Ohio is even worse, charging penalties and interest to those who fail to file their sales tax and other tax returns.

“You really have to be diligent about keeping your end of the bargain,” Cibella said of filing business with the state.

Cibella stressed the importance of paying taxes when growing or building a business, even if the company is not yet making a profit.

She reminded the business owners, many of whom already have one or more limited liability companies in their names, that nearly all LLCs must provide beneficial ownership information, a new requirement that some in the room had not heard of. Cibella said the business owner’s address on his or her driver’s license must match the LLC’s address, even if the business owner rents space elsewhere for his or her business operations.

Although Intuit QuickBooks is one of the most widely used accounting programs due to its ease of use and low cost, Cibella recommends Wave for new business owners. It’s cloud-based and can be used on both the computer and phone, allows for invoicing, and integrates with professional accounting systems for tax filing.

Thursday’s Business Accelerator program was the second in the free series. The first, held in late July, offered information on using e-commerce to start or grow a business.

Tanisha Wheeler, Regional Director of the Minority Business Assistance Center at the Youngstown Business Incubator, also gave a brief introduction to the services offered by MBAC and introduced some of the MBAC team members in attendance.

Other upcoming topics of the 717 Business Accelerator program include:

• Find and hire great employees: August 27, 12:00 p.m. to 1:00 p.m. (webinar) presented by Michelle Herron, Manager of Recruiting and Training at 717 Credit Union.

• Contractor’s workshop: Sept. 17, 5:30-7:30 p.m. at Brite Energy Innovators, 125 W. Market St., Warren.

• Basics of commercial law: Sept. 19, 11:30 a.m. to 1 p.m. at The Magic Tree, 7463 South Ave., Boardman; presented by attorney Joe Datchuk, 717 Credit Union.

• Business Marketing Bootcamp: Oct. 9, 11:30 a.m. to 1 p.m. at The Chophouse, 9519 E. Market St., Warren; presented by Wheeler.

Pictured above: Barb Cibella of Black Cat Tax speaks at the 717 Credit Union Business Accelerator program at the Chophouse on Thursday.

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