Community Interview: James Cole of Cleveland Business Services

In this series, we connect with professionals in the devanooga community—lawyers, accountants, and other experts—to share their insights and advice. Whether you’re a developer, entrepreneur, or freelancer, these conversations are designed to help you navigate the complexities of your career and business with confidence.

Hi James! Thank you for taking the time to do this interview! Could you tell us a little more about yourself and Cleveland Business Services?

My name is James Cole. I am a Cleveland, TN native; born and raised. I am 43 years old and have been in small business management for almost 20 years and this will be my 13th tax season as a paid tax preparer. I have an Associate’s degree in Business Management with an emphasis on Accounting. I have a Bachelor of Science in Accounting with a minor in Human Resources. I am an annual participant in the AFSP program for the IRS to stay on top of the ever-changing tax codes.

Do you work with tech professionals often?

I work with clients in just about every market you can name. I do have several clients in the IT world, a couple in software development, and just a variety of clients in a variety of niches.

What are some common accounting mistakes you see freelancers make, and how can they avoid them?

The most common issue I see is clients co-mingling bank accounts. People taking the family to the zoo and using the business bank account. Pay yourself, once a period, from the business account and put that into your personal account. Then from there, do with what you will. But keep your personal and business funds and accounts 100% separate. You will never be mad that you kept them separate but you may one day seriously regret not keeping them separate.

I’m sure many have seen some grandiose claims of write-offs in short form content online, and it’s hard not to think of Kramer in Seinfeld crying “THE WRITE OFF PEOPLE” from Seinfeld. Is there any general advice on ﬁnding that middle ground between being missing potential deductions and ending up in trouble or an audit?

Keep as many records as you can. It is best to over document everything. Then there will be no question you cannot answer. A good set of books is always a great way to keep track of everything. If you are unsure if it will help you, keep up with it and ask your tax professional or your accountant.

What tax implications should employees at startups be aware of when they receive shares or stock options?

People generally think that if it isn’t a paycheck, it isn’t going to be taxable. While you do not have to pay taxes immediately on those things, you will owe capital gains taxes on it when you sell those shares. If the shares are received in lieu of wages, they will be included on your W2 and you will owe standard income tax on them as well.

Do you have any advice for tech professionals transitioning from traditional employment to freelancing or starting their own business?

Just prepare. Know that YOU WILL ABSOLUTELY owe taxes this year if you have been profitable at all. You are having to pay income tax AND your Social Security and Medicare taxes. If a W2 employee is used to getting a refund or not owing much at all, certainly expect to be paying in your first successful tax year.

How important is it for tech professionals to separate personal and business ﬁnances, and what are the best ways to do that?

I LOVE that this is a separate question. It is one of the most important things I discuss with my clients. I don’t care if you are in tech, food service, construction, or accounting; regardless of your market, it is SUPER important to keep your personal and business finances separate. While there is not a law saying that you have to, any business owner or self-employed individual should. In the event you’re being reviewed or audited, imagine your agent asks for a glass of water. Would that auditor be happier with a glass of clean, cold water, or a glass of muddy brown water. You want your records to be crystal clear. I have heard several people say they wish they would have done better in this department. I have never heard someone say that they wished they didn’t.

What should small tech businesses know about choosing and using bookkeeping and accounting software?

At the end of the day, there are people that do this for a living. Consult a professional. While I may be a bit biased, I believe it is so important to have someone who has your back. You go be good at what you are good at and have people who are good at what you don’t know. I have a local guy that I hire for my IT needs because I get lost on this stuff. I help him with his taxes and bookkeeping.

Many of our members have complained about various services operated in an antiquated fashion. What things do you do at your ﬁrm to make things efﬁcient and smooth?

While we try to utilize some of our industry’s freshest resources and software, the thing that makes us different is that we care. We have an awesome app that we are rolling out this tax year in which we can help you get filed without leaving your home. But I still have to say that we care about your business almost as much as you do. We have a team of very passionate people who want nothing more than to help you succeed, however that looks. We are all local. We are a phone call away and ready to help with anything that we can for our people. So, I would have to say that our people are what makes us different.

When choosing an accountant, what are some red flags or things to look out for during that process?

When first meeting, if it seems to you that they are just talking over your head and not taking time to explain things or answer questions, you may need to keep on looking. The decision to hire an accountant is not one that any business owner is taking lightly. You need to make sure that you find one that you can talk to. Cleveland Business Services takes pride in the fact that we are here for our clients. We take time to explain things in a way that you can understand. This is the compliment I get most often from our clients.

Our freelancers and small business owners often discuss how to spot problematic clients in order to dodge them ahead of time. What would you say are signs of a potentially problematic accounting client? In other words, what can individuals do to help themselves be a good client and receive a better experience with their accountant?

In this world, you MUST be able to openly communicate. Each business has a unique need and we help come up with processes that best work for the business and their needs. The lack of communication is what is most harmful to the accountant-client relationship. When you have someone helping you with these matters, it is important to keep them in the loop-respond to the emails, answer the questions, etc.

Never underestimate the importance of a good, quality set of books. Not only does this help you manage your business and budget, it makes the upcoming tax season much easier to navigate if you are prepared and stay on top of it all year. Do not wait until January to get your records together. With a good set of books, you can be ready to file as early as the middle of January, without all the worrying, finding receipts, etc.

For those that wish to contact you about any of the topics we discussed in this article, what is the best way to do that?

We have a wonderful staff standing by to answer any questions or help in any way that they can. Just call 423-86-TAXES, that is 423-868-2937. Or I can personally be reached at [email protected]

If you’re looking for a local accountant, considering giving James at Cleveland Business Services a call.

James Cole
Cleveland Business Services
cbstn.net
423-86-TAXES