Payroll question

[imjulier]

I have a new S corp client (new to me, they've been in place since 2004), they have not been doing payroll thoguhout the year (filing 941s). The only way I can think to avoid penalties is by spreading the annual payroll over the 4th quarter months and pay 941 taxes each month (since they will exceed $2500). Is there any other way I'm not thinking of? Thanks for any input.

Julie

[Gail in Virginia]

If it were me, since I sign those 941's that I prepare them, I would prepare them for the quarters they were due for, tell the client that they screwed up, and write the IRS a letter begging them to waive the penalties this time since the client was new to this and thought that taxes were only due once a year (assuming that is true.) I would not knowingly falsify a 941 by saying the wages were paid in the fourth quarter if they were actually paid throughout the year. But maybe I misunderstood your question.

[michaelmars]

i'd file them in the 4th quarter, why beg now for penalty relieve. save the begging till you need it, and who says he took payroll over the year, he took advances or distributions he planned to pay back but since he cant he charged them to payroll at year end. and as gail said, he didn;t know but now he does [thanks to you] and thats your excuse IF and When it gets questioned.