Payroll Tax Deposits

[S T]

One of my clients received this today! (even though it is dated 12/27/10)

No more 8109 payroll deposits at clients bank!

My PDF was too big to post - so I tried to paste and copy the text

CP-247
Notice date-DECEMBER 27.2010
Ogden, UT 84201-1498
To contact us Phone 1--800-830-5215
Page 1 of 1

Important message about Federal Tax Deposit coupons -You can no longer make required deposits using Forms 8109/8109-8 - Because of a regulatory change, we will no longer accept Federal Tax Deposit coupons.

Beginning January 1. 2011, you will have to make your required Federal Tax
Deposit electronically. Otherwise, you may be charged a 10% penalty for each
non-electronic deposit.

Next steps
Important reminder • Be sure to make your Federal Tax Deposit electronically to avoid
a 10% penalty for each non-electronic deposit

Additional information
What you need to do
• Check with your financial institution to find out its cut-off date for accepting Federal Tax Deposit coupons.
• For a convenient and quick way to make timely electronic deposits, we encourage you to use EFTPS (Electronic Federal
Tax Payment System). This system is a free, secure service available from the U. S. Department of the Treasury.
• If you're already making your deposits electronically. please continue to do so.
• For more information about electronic payment methods, visit irs.gov/epay or call
1-800-830-521S.
.
• Visit www.eftps.gov or call EFTPS Customer Service at 1-888-434-7338.
• For information about Federal Tax Deposits. visit www.irs.gov and search: "Tax Topic 757". You can also find the following online:

- Employer's Tax Guide (Publication 15, "Circular E"
- Agricultural Employer's Tax Guide (Publication 51, "Circular A"
- Deposit Requirements for Employment Taxes (Notice 931)
• Keep this notice for your records.
If you need assistance, please don't hesitate to contact us.

Sandy

[gboykin]

Yep. I got all my clients converted this month. I didn't make a single 8109 form. All payroll clients must pay either electronically through EFTPS website or telephone. Didn't want to have it all fall in my lap next month as I'm trying to close out W-2's.

[geekgirldany]

I have two clients that are still using the coupons. One I've got to get switched over. The other one just told me that their bank stopped accepting coupons at the first of December. So for whatever reason they did not tell me that. They had 2 weeks of payroll taxes due. After I got the letter the IRS sent them I got them up and going on EFTPS. So the banks must be cutting if off sooner than January 1 to force people to get signed up.

[JohnH]

I had about a half-dozen holdouts whom I helped get set up on EFTPS in the past couple of months. In each case we set up the account, then ran a test payment of $100 or so just to be sure everything was correct, then deducted the $100 from their next FTD which was made online or by phone. All in all it went fairly smoothly. One of the clients' bank had advised them back in Oct that they would no longer accept 8109 coupons after Nov 30.

[S T]

Yep

I have one "lonely" payroll client that refuses to do electronic - so now he has to join the rank and file and get on with the electronic payment age. I was able to convince him to electronically file returns , thank goodness, but he is really determined not to process electronic payments.

My other client, I am not sure - they are a "household employee" so I believe all is handled through 1040ES and the Tax Return, just that we have to file Quarterly on the State.

So I I blanked out the info on the letter from the other client and emailed to him - advising he has approximately 2 weeks to decide what he wants to do, as if he has any choice

S

[Whitney38]

How do you apply to electronically file tax deposits for your clients? What is the procedure? Do you have to update your EFIN application? Lots of questions. Hope someone has answers. IRS web page somewhat confusing as to step by step procedure.
thanks.

[JohnH]

We're not talking about making federal tax deposits for the clients. (At least, that's not what I'm talking about). The question is about helping clients get enrolled with EFTPS so they can make their Fed Tax Deposits online or via telephone after 1/1/11 because taking the 8109 to the bank will no longer be an option.

The client needs a PIN number to start the enrollment process. They should have received a letter which begins "Welcome to EFTPS" about 2 months ago with this PIN number. But if they lost the letter, it's easy enough to call IRS and get another one immediately. (I had to do that for a couple of clients). The enrollment process involves registering a bank account number with IRS for them to use in drafting the tax deposits, plus setting up a user name and password for future access to the system. Altogether it takes about 8-10 minutes to complete the enrollment process, provided you have everything you need on hand when you begin. The harder part is training the client to actually use the system, but usually they catch on after one or two walk-throughs.

Here's the link to get started: https://www.eftps.com/eftps/

[Jesse]

Do any of you make the actual deposits for your clients?

I personally don't think I want that responsibility and am curious how others feel.

[RLymanC]

Payroll Deposit

One of my payroll clients calls me when he wants to pay form 941. He already knows the amount due from the payroll report. All I do is make the payment for him using his bank account.

[DaveO]

I won't make the payments but I will provide a detailed instruction page. I figure no matter why the funds were not there it would be my fault if their account is overdrawn or the payment is late.

[JG EA]

Yep. I got all my clients converted this month. I didn't make a single 8109 form. All payroll clients must pay either electronically through EFTPS website or telephone. Didn't want to have it all fall in my lap next month as I'm trying to close out W-2's.

ST, don't forget this telephone option stated above (after filling out the EFTPS form and sending it in) for the payments . That may seem simpler to your client. It really is easy,

Since they will have clients bank account info he just calls, puts in his EIN, PIN (which they assign I believe) and answer a few questions. I print out the QB "check" for the 941 payment and that has all the info on it. They also ask for the Social Security amounts added together and Medicare added together and withholding amount. So add before calling. Your client can call it in early and pick the date to pay.

[luke]

Skip

the question about breakdown of social security/medicare etc
deposit goes thru without it!

[geekgirldany]

I had my last one call today and say their bank is not taking the coupon anymore. So looks like all the banks stopped taking them December 1. Will have to get him setup tomorrow.

I have several that I make the payments for them. But I also get a signed payroll engagement letter stating that although I will make the payments for them it is their responsibility to have the money in the account. I am not liable for any type of fees that may occur because of lack of money in the account. I also put that it is the responsibility of the taxpayer to make sure all payments are made on time and they are responsible for any interest or penalties from the IRS. (that is it in short)

I tell them that all payments will be made on or before the due date. That I will call to make sure they have money in the account and ask what date they want the payment to come out. If they tell me after the 15th or whatever due date if semi-weekly.... then they must make the payments themselves.

I do have one client that I would not do the payroll payments for her. She was always bad about not paying on time with the coupons and actually still owes back payroll taxes. So I should her how to do it on the computer and also about paying over the phone.

Dany

[RitaB]

Sounds about right.

So for whatever reason they did not tell me that.

I am glad to know this is a phenomemon that others of you also experience.

AAUGHHH!