Christina Brewer
Operations
Pat Persinger
Bookkeeping Specialist
Susan Guyer
Accounting Supervisor
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(812)-883-6938
906 W. Mulberry St
P.O. Box 225
Salem, Indiana 47167
Latest news
Hiring for the summer?
That’s exciting—until the IRS gets involved. While onboarding interns or part-time help sounds simple enough, summer hiring is one of the most common ways small business owners get tripped up on payroll, compliance, and classification. And yes, even a single misstep—like putting a W-2 employee on a 1099 “just for the summer”—can cost you big. Let’s Clear This Up: Not Everyone’s a Contractor You’re not alone if you’ve ever said: “We’re just paying them a flat rate—it’s easier that way.”
“They’re only here for 10 weeks.”
“They’re a student; it’s not really a job-job.” Here’s the hard truth:
If you control when, where, and how someone works—you’re probably supposed to issue a W-2. The IRS doesn’t care if it’s part-time, seasonal, freelance, or “just a favor.” If they look like an employee, they are one—and they want to see payroll taxes, not contractor payments. Need the official word? See IRS guidelines on worker classification Interns? Yes, They Usually Count Too. Many businesses think unpaid internships are a gray area. But unless it’s tied to a formal educational program with no expectation of compensation, the Department of Labor may classify your intern as an employee. That means: Minimum wage laws apply You may owe payroll taxes Workers’ comp coverage could be required Rule of thumb: If they’re contributing to your business, they probably need to be on payroll. Don’t Miss Out on This: The Work Opportunity Tax Credit (WOTC) Here’s some good news: If you’re hiring people from certain target groups—like veterans, long-term unemployed, or summer youth employees—you might qualify for the WOTC, which can reduce your federal income tax liability by up to $2,400 per qualifying hire. But: You have to apply before hiring The paperwork needs to be filed with your state agency Most businesses never realize they’re eligible More info? Explore the WOTC program here Other Things to Nail Down (Before Your First Payday) Set up correct federal and state withholding Ensure you have an active payroll system (manual payments often miss required filings) Collect and retain Form I-9s and W-4s Check if local labor laws require sick leave or additional reporting for part-time workers Know if you need to pay overtime—even if it’s “just for the summer” The Bottom Line: Don’t Wing Payroll We get it—your focus is on growing your business, keeping clients happy, and getting help in the door. But ignoring payroll compliance (even for “just a few weeks”) can lead to: Penalties for misclassification Missed tax credits State audits Unhappy former employees filing claims you didn’t see coming Need a Hand Sorting It Out? Call Us Before You Hire We’ve helped hundreds of small business owners set up summer payroll the right way—without overcomplicating things or drowning in red tape. If you’re planning to bring on part-time, seasonal, or intern help in the next few weeks, let’s talk.
We’ll help you stay compliant, minimize tax risk, and maybe even find some credits you didn’t know existed. Contact our office before you run that first paycheck—we’ll help you do it right from the start.
I just finished reading a report on what tax professionals should expect from the Internal Revenue Service (IRS) in the very near and distant future. These changes are coming from the new Trump administration cuts via DOGE. First off, is a 40% planned workforce deduction by May 15. This will affect all parts of the IRS but mainly in audit and tax assistance areas. Second is the closing of over 110 taxpayer assistance centers. These centers help taxpayers file tax returns, answer questions and help in resolving issues. Lastly, the Direct File Program started in 2024 is under review and may not be continued. So, what does the mean for the taxpayers? A smaller workforce means less person-to-person interaction on matters. Any attempt to directly contact a person at the IRS will probably be met with a long time on hold. The IRS will also be using technology to replace a lot of what is being done by a person. Systems will be put into place that will review returns and flag entries that may or may not be “normal”. One should expect to see more correspondence from the IRS from this questioning an item on the return. IRS will push taxpayers to communicate with them via digital platforms like through an IRS account, which we talked about in previous blog post. IRS will also push that more documentation will have to be submitted digitally to work in their systems. Taxpayers will either have to work with the IRS via their platforms or seek out the assistance of a tax professional to help with issues. Tax professionals are also going to have to improve the way they work with the IRS to have an efficient and effective way of communicating. Taxpayers who used the Direct File Program in 2024 may have to find another way to file in 2025 and beyond. They will either have to look at one of the other “free” programs from a third party, buy the tax preparation software or employ a tax professional to prepare their return. With these changes, taxpayers are also going to have to be careful with their documentation of items claimed on the return. Documentation will need to be more real time via dates of transactions and real documents, not estimates. The reduction in the IRS is going to result in headaches, less human interaction, and more reliance on technology