“Payroll touches nearly every part of an organization, and even small errors can create larger downstream risks,” said Adam Schwelnus, CPA, CGMA, Partner, Client Accounting & Advisory Services. “Taking a proactive, coordinated approach is key to maintaining compliance and supporting business growth.”

Worker Classification Matters

One of the most common challenges is worker classification. Determining whether individuals are employees or independent contractors, or whether they qualify as exempt or nonexempt under wage and hour laws, requires careful analysis of multiple standards, including IRS guidance, Department of Labor rules, and state-specific requirements. Misclassification can lead to costly audits and compliance issues.

Accuracy Depends on Strong Systems and Coordination

Payroll accuracy also depends on properly managing earnings and deductions. From tax withholdings to benefit elections and garnishments, even minor errors can result in incorrect pay or compliance gaps. Strong collaboration between payroll, HR, and third-party providers is essential to help ensure employees are paid correctly and on time.

Don’t Overlook Taxable Compensation

Another area of risk involves properly identifying taxable compensation. Items like bonuses, gift cards, incentives, and certain fringe benefits may need to be included in taxable wages. Organizations often run into issues when compensation is issued outside of payroll’s visibility, underscoring the importance of clear internal processes and communication.

Proactive Planning Reduces Risk

A proactive approach to payroll—especially during periods of change, such as mergers, system transitions, or new benefit offerings—can help reduce risk and improve efficiency. Partnering with experienced advisors and ensuring your team has access to reliable resources for guidance can make a meaningful difference when navigating complex or evolving requirements. Regular reviews, strong internal controls, and cross-functional coordination remain critical to maintaining compliance and supporting long-term stability.

Benefits of Working with a Payroll Provider

Working with a payroll provider can also help strengthen accuracy and compliance. Employers gain access to specialized technology, dedicated payroll expertise, and support for routine responsibilities such as tax filings, wage calculations, direct deposit, garnishments, and year-end reporting. A strong payroll partner can reduce administrative burden, improve consistency, support employee self-service, and provide reliable resources when questions arise, especially as organizations grow or expand into new

Kruggel Lawton’s Client Accounting and Advisory Services team works with organizations to strengthen payroll processes, implement reliable systems, manage compliance requirements, and navigate complex employment-related tax considerations. Learn more about how our team can support your payroll function and help reduce risk.

Key Highlights

• Applies to most Indiana taxes, including income, sales and use, and withholding, for periods ending before January 1, 2024
• Provides a full waiver of penalties, interest, and collection fees upon successful participation
• Available to resident and nonresident individuals and entities that did not participate in Indiana’s 2005 or 2015 amnesty programs
• Liabilities must be paid in full during the amnesty window or through a payment plan completed by June 7, 2027

Important Considerations

To qualify, taxpayers must be current on all required filings. The program applies to known and assessed liabilities, making it especially valuable for those with existing balances or collection activity.

Eligible taxpayers who choose not to participate may be subject to additional penalties.

Amnesty vs. Voluntary Disclosure

While amnesty provides the most favorable financial outcome for known liabilities, taxpayers with unfiled or undisclosed exposure should also evaluate Indiana’s Voluntary Disclosure Agreement (VDA) program. Depending on the situation, the VDA program may provide:

• A reduced lookback period
• The ability to file anonymously
• Penalty relief (interest typically still applies)

Next Steps

With a limited participation window, now is the time to:

• Identify potential Indiana exposures
• Quantify outstanding liabilities
• Determine whether amnesty or the VDA program provides the better outcome

If you would like assistance evaluating your options or preparing for the program, please reach out to your Kruggel Lawton tax advisor.

Why Are Assessments Increasing?

A major factor behind these higher assessments is a statewide shift in valuation methodology. The Indiana Department of Local Government Finance (DLGF) has begun updating long-standing cost models that were widely considered outdated. These revised models incorporate more recent construction data and modern assumptions, resulting in broad, formula-driven increases in replacement cost new less depreciation (RCN-D).

While this modernization effort brings valuation methods more in line with current data, it also introduces challenges for property owners. Cost-based models can apply increases broadly and may not fully account for property-specific factors such as actual condition, functional or economic obsolescence, or local market dynamics. As a result, many commercial properties may now be over-assessed relative to true market value.

The Importance of the Appeal Deadline

Property owners do have the right to challenge their assessment—but timing is critical.

Key deadline: June 15, 2026, or within 45 days of the date listed on your Form 11, depending on when it was issued.

Missing this deadline means waiting another year to appeal, even if errors or overvaluation exist. Additionally, this year’s assessed value often becomes the baseline for future increases, magnifying the financial impact of inaction.

What Property Owners Should Do Now

Before assuming an increase is unavoidable, take time to review your assessment carefully. A thorough review should include:

• Verifying key property details such as size, condition, use, and classification
• Identifying any improvements—or deterioration—that may not be accurately reflected
• Comparing your assessment to recent market data and comparable properties
• Evaluating whether the assessed value fairly reflects your property’s true market value

If discrepancies or potential overvaluation are identified, an appeal may be warranted.

How Professional Guidance Can Help

Navigating property tax appeals can be complex, particularly in a year with widespread reassessment activity and increased appeal volume. Working with experienced advisors can help you:

• Determine whether your assessed value is supportable
• Identify opportunities for assessment reductions
• Navigate the appeal process efficiently and effectively

Early review is especially important this year to preserve your rights and maximize potential savings.

Don’t Wait Until the Deadline

If you own commercial real estate in Indiana and have received a higher-than-expected assessment, now is the time to act. A proactive review can help ensure your property is assessed fairly—and protect you from unnecessary tax exposure in future years. If you have questions about your assessment or would like assistance evaluating your options before the deadline, consider reaching out to your Kruggel Lawton tax advisor or Brandon Gritton, CPA, Director of State and Local Tax, as soon as possible.

While demand for our core accredited business valuation and transaction support services remains strong, our advisory offerings continue to grow. Clients increasingly seek broader financial insight and higher-level strategic support that extends beyond a single deliverable.

Services include:

• Buy-side and sell-side transaction advisory
• Targeted quality of earnings and flexible financial due diligence
• Lender-ready business plans and financial modeling
• Reasonable compensation analyses, expert witness services, and litigation support
• CFO-level support and NetSuite advisory services

If you’re facing a transaction, planning decision, or financial complexity where added clarity would be helpful, we encourage you to reach out to Dan to discuss how these services may support your goals.

This change impacts the following products:

• QuickBooks Desktop Pro Plus 2023
• QuickBooks Desktop Premier Plus 2023 (all industry editions)
• QuickBooks Desktop Enterprise Solutions 23.0
• QuickBooks Premier Accountant Edition Plus 2023
• QuickBooks Enterprise Accountant 23.0
• QuickBooks Desktop for Mac Plus 2023

Support for QuickBooks Desktop versions prior to 2023 already ended in May 2025.

What Happens If You Don’t Upgrade?

After May 31, 2026, discontinued versions will:

• Lose access to live technical support from Intuit
• No longer connect to Intuit services such as payroll, payments, and bank feeds
• Stop receiving important security updates, which may increase the risk of data or system vulnerabilities

Services That Will No Longer Be Available

Payroll Services

• Assisted Payroll
  Payroll tax calculations, tax forms, and tax filings will stop. Your payroll subscription will be deactivated.
• Basic or Enhanced Payroll
  Payroll tax calculations and forms will no longer be available, which may result in incorrect payroll amounts. Subscriptions will be deactivated.
• QuickBooks Workforce
  Employees and employers will lose access. An active payroll subscription and supported QuickBooks version will be required to resume use.

Payments & Credit Card Processing

• Payment Processing
  Credit card and check payments will no longer process within QuickBooks Desktop 2023. Instructions will be provided for handling payments outside the software.
• Merchant Service Deposits (Reconciliation)
  Downloading deposit details directly into QuickBooks will no longer work.
• Recurring Payments
  Recurring transactions will continue to process, but they will no longer sync with QuickBooks. Management will need to occur through Intuit’s Merchant Center.
• eInvoice
  Email invoices with payment links will no longer be supported without a current version and active payments subscription.

Other Features Affected

• Accountant copy transfers
• Contributed reports
• Multicurrency and exchange rate functionality
• Online banking (downloads, payments, and transfers — including uploaded transactions)
• Emailing reports or forms directly from QuickBooks
• Shipping Manager access

Considering Your Options?

Many businesses are choosing to transition to QuickBooks Online as Desktop support phases out. Kruggel Lawton can help make that move as smooth as possible.

We can assist with:

• Evaluating the right QuickBooks Online plan for your business
• Transferring and merging historical data
• Initial setup and cleanup
• Training and ongoing support

Kruggel Lawton also has access to new-user discounts that may be available to you when switching to QuickBooks Online.

If you’d like to discuss your options or schedule a consultation, please contact Meghan West, meghanw@klcpas.com, to get started.

Core Responsibilities

Although the exact parameters of finance committee member participation will vary based on factors such as your staff size and organizational budget, the committee generally should be involved in:

Board communication. The committee should work with your executive leadership and financial staff to determine the best way to convey to the board any financial information it needs for sound decision-making. Not everyone understands financial statements and related jargon. Numbers require explanation and context; the committee must connect them to the organization’s mission, goals and strategies.

Budgetary planning. Before beginning the budgeting process, the committee should identify key assumptions and initiatives that will influence it. Committee members and staff must discuss internal and external factors that could affect budgets over the next several years, including your organization’s strategic plan. After approval, the committee should monitor budget variances.

Financial reporting. The committee should oversee the preparation and distribution of financial statements and set expectations for staff about the level of detail, frequency and deadlines of other financial reports. It must monitor the adequacy of the organization’s financial resources and how they’re allocated toward accomplishing its mission. Additionally, the committee should assess whether resources are sufficient to support expected program and operating expenses. Simultaneously, the committee must ensure that the requirements for any donor-restricted contributions are met.

Internal controls. Properly developed and implemented internal controls are essential for protecting your organization’s assets. Have your finance committee work with staff to develop effective controls and policies, then document them in a manual. It’s also the committee’s responsibility to ensure that approved controls are followed and that filing deadlines are met.

Policy guidance. The committee must establish and confirm compliance with fiscal and related policies and procedures. Approved policies should reflect your organization’s specific circumstances, such as its size and life-cycle stage, rather than just general “best practices.” However, the committee should take care not to overstep. It must respect the line between the governance of overall policies and the actual implementation and execution of specific staff processes and procedures.

Audit oversight. If your organization doesn’t have a separate audit committee, the finance committee should oversee the audit. The committee must engage and regularly interact with the auditors, review the auditors’ report and IRS Form 990, present the audited financial statements to the board and propose changes to implement any auditor recommendations.

Investment strategy. Even if your organization doesn’t have enough cash to support a separate investment portfolio, liquid funds need to be managed to maximize revenue. In this situation, it falls to the finance committee to develop an appropriate investment policy and, when needed, retain qualified investment advisors. However, a separate investment committee is advisable for organizations with substantial investments, planned giving programs or endowments. And remember that fiduciary responsibility isn’t limited to the committee’s members. The entire board has a duty to safeguard your organization’s net assets.

Why a Strong Finance Committee Matters

When a nonprofit’s finance committee functions effectively, it does more than monitor budgets and financial statements — it strengthens the organization’s overall governance. Clear oversight, sound financial planning and well-designed policies help build trust with donors, regulators and the community you serve. By investing in a knowledgeable and engaged finance committee, nonprofits can better protect their assets, manage risks and position themselves to advance their mission for years to come.

“When nonprofits prepare well, an audit becomes so much more than a compliance requirement,” said Sara Sweers, CPA, a partner in Kruggel Lawton’s Portage office. “It turns into an opportunity to strengthen financial transparency, build donor trust, and give leadership clearer insights into the organization’s health.”

Here’s a practical, approachable checklist to help nonprofits get audit ready this spring.

1. Start With Your Financial Records

Auditors rely on complete, organized financial information. Make sure you have:

• Bank reconciliations through year-end
• Updated general ledger entries
• Clear documentation for revenue and expenses
• A current chart of accounts
  If something feels messy, address it early rather than waiting until the auditors arrive.

2. Review Your Internal Controls

Audits aren’t just about numbers, they’re about processes. Nonprofits should be able to show:

• Who can approve expenses
• Who records transactions
• Who has access to bank accounts
• How receipts and donations are handled
  Even small organizations benefit from simple, well‑documented controls.
  

3. Gather Supporting Documentation

Your auditor may ask for:

• Grant agreements
• Donor letters
• Board minutes
• Payroll records
• Major contracts
• Lease agreements
  Having these documents ready saves time and allows the audit to move smoothly.
  

4. Confirm Donor Restrictions

If your nonprofit receives restricted gifts, make sure you have:

• Written donor communications
• Clear tracking of how funds were used
• A schedule of restricted net assets
  This is one area where nonprofits often struggle—the cleaner the documentation, the better.
  

5. Connect With Your Board

Audit results reflect leadership practices. Before the audit begins:

• Ensure board minutes are complete
• Provide board members with financial reports
• Review policies on conflicts of interest, whistleblower protections, and record retention
  

6. Ask Questions Early

Your auditor is a resource. If you’re unsure about how to treat a revenue stream, classify an expense, or present a new program, asking questions early prevents surprises later.

If your organization is preparing for an upcoming audit or looking to strengthen its financial processes, the right guidance can make all the difference. Kruggel Lawton’s award-winning team understands the unique challenges nonprofits face and is committed to supporting organizations of every size with clarity, confidence, and care.

March 16 Deadline

Even though pass-through entities generally don’t owe federal income tax at the entity level, they still must file a federal income tax return. Partnerships and LLCs treated as partnerships for tax purposes file Form 1065, “U.S. Return of Partnership Income.” S corporations file Form 1120-S, “U.S. Income Tax Return for an S Corporation.” If your pass-through entity uses the calendar year for tax purposes, as most do, the deadline for filing the federal income tax return for its 2025 tax year is March 16, 2026 (because March 15 falls on a Sunday).

The March 16 deadline can be extended by six months to September 15, 2026, by filing IRS Form 7004, “Application for Automatic Extension of Time to File Certain Business Income Tax, Information, and Other Returns,” by March 16. Keep in mind that if you file an extension for the pass-through entity’s return, you (and any other owners) will also likely also need to file extensions to October 15, 2026, for your individual 2025 return.

Schedules K-1

For each tax year, pass-through entities must send out Schedules K-1 to their owners. These forms report each owner’s share of the entity’s tax items. Schedules K-1 can be sent to owners electronically. And they must be included with the entity’s federal income tax return for the year.

Because pass-through entity owners rely on Schedules K-1 to prepare their returns, it’s desirable to get them out as early as possible. However, if an entity’s 2025 return filing deadline is extended to September 15, 2026, that also becomes the deadline for providing Schedules K-1 to the owners.

Three Tax Law Changes to Note

The One Big Beautiful Bill Act (OBBBA), signed into law July 4, 2025, included several tax changes that will affect 2025 returns of pass-through entities. Here are three of the most important:

1. First-year depreciation. The OBBBA permanently restored 100% first-year depreciation for eligible assets acquired and placed in service after January 19, 2025. Before the OBBBA, 100% bonus depreciation was last allowed for eligible assets placed in service in 2022.

For eligible assets placed in service in tax years beginning in 2025, the OBBBA increased the maximum amount that can be immediately deducted via the first-year Section 179 expensing election to $2.5 million (up from $1.25 million before the OBBBA). The deduction begins to phase out dollar for dollar when asset acquisitions for 2025 exceed $4 million (up from $3.13 million before the OBBBA).

The OBBBA also established 100% first-year depreciation for nonresidential real estate that’s classified as qualified production property. That basically means factory buildings.

2. R&E expenditures. The OBBBA allows businesses to immediately deduct eligible domestic research and experimental (R&E) expenditures that are paid or incurred in tax years beginning in 2025 and beyond. Before the OBBBA, these expenditures had to be amortized over five years.

Eligible small businesses can elect to apply the new immediate deduction rule retroactively to pre-2025 tax years beginning in 2022, 2023 or 2024. Also, all taxpayers that made R&E expenditures in tax years beginning in 2022 through 2024 can elect to write off the remaining unamortized amount of their R&E expenditures over a one-year or two-year period starting with the tax year beginning in 2025.

3. Business interest expense deductions. For tax years beginning in 2025 and beyond, the OBBBA permanently installed more favorable rules for determining how much business interest expense can be currently deducted. While most small and midsize businesses are exempt from the business interest expense deduction limitation rules, check with us regarding the status of your pass-through entity.

As the deadline for 2025 federal income tax returns for most pass‑through entities draws near, it’s important to begin the process promptly as you must take action by March 16, at minimum, to file for an extension. Contact your KL advisor with any questions or concerns.

Starting in 2026, employers will be legally required to list qualified overtime compensation as its own line item, and taxpayers will be able to use that information when filing their 2026 returns in 2027. There is no business requirement to provide this information for 2025, and it will be up to the employee to calculate it on their own for 2025 dating back to January 1.

IRS Notice 2025‑69 also confirms that only the extra half‑time premium in overtime pay qualifies for the exemption — not the full time‑and‑a‑half rate. Tips will continue to be reported in Box 7, making that portion of the exemption easier to track. To learn more and view the full IRS Notice 2025-69, click here. If you have questions or concerns, please contact your KL advisor.

Additionally, the requirement for higher earners to make catch-up contributions as mandatory Roth contributions takes effect on January 1, 2026. This regulation applies to those with FICA wages of $150,000 and above during 2025.

Self‑Employed Individuals:
The Roth catch‑up requirement is based on FICA wages (Form W‑2, Box 3). Because self‑employment income is subject to self‑employment tax rather than FICA, the Roth catch‑up rule does not apply to self‑employed individuals.

Below is a comparison chart showing limits for 2026, 2025, and 2024. If you have questions on how the new limits may impact you, please reach out to your Kruggel Lawton advisor.