How do you (TPAs out there) tell your client to pay their 945 withholding??

The "Same Day Fed Wire" is too complicated for any of our clients to understand and figure out;
the payroll companies are not submitting the 945 payments;
the 8109-B's are penalized (according to rumor) although I've never heard of an actual penalty;
and the EFTPS takes 2 weeks+ for the client to set up (by then they've forgotten about it)...

I am just curious how you guys out there do this. We need to give our clients an answer that is un-complicated and concise. THANKS!

EFTPS takes a few weeks to set up, but set up is a 1 time thing, then they can login anytime and make payments. If it is such a hassle for them, set it up for them yourself, it takes a few minutes and when they get the PIN letter they can get you a copy, you can set up the login info and be done. If they are not willing to help a little, then I guess they need to be willing to pay the penalties and interest associated with not complying.

We don't do it, if a plan is with a 401(k) vendor the vendor processes the distribution and does the withholding & reporting. If the client is not with a vendor, we process all distributions thru Penchecks where they do the withholding and reporting.

We tried getting clients to do the withholding deposits and us doing the 945s, it was a nightmare of paperwork and subsequent IRS correspondence. Plus in Calif we have state withholding and the state processes are even worse.

Although not related to the electronic versus 8109 fling issue, I'll just throw this out there because I've run into it before.

Some banks (even the plan sponsor's bank) will not accept withholding and 8109 forms. I read somewhere (could have been the instructions for the 8109) that banks do not have to accept the withholding.

Maverick

That might be true...I honestly don't know. But getting a step further off point, banks definitely won't accept a check from another institution for a tax deposit, because the funds have to clear that day. So you have to deposit the check from the investment company to the sponsor's account, wait a couple of days, then make the tax deposit. Yes, it's ok to run withholding through the sponsor's account.