Pub. 2 2012-2013 Issue 3

O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S - H E L P I N G C O L O R A D A N S R E A L I Z E D R E A M S November • December 2012 11 more frequently, you must provide the withholding notice once per year at a reasonable time before the first pay- ment each year. Format To comply with the withholding notice requirements, banks must pro- vide clients with an IRS Form W-4P, Withholding Certificate for Pension or Annuity Payments, or a substitute form. If your bank offers a substitute form, the form must follow certain required guidelines or be submitted to the IRS for approval. Substitute Forms W-4P must include the following information: • the form number (Form W-4P); • the number and expiration date assigned by the Office of Management and Budget (OMB) to the Form W-4P(OMB 1545-0074); • space for the client’s name and address; • space for the client’s Social Security number; • an entry that the client can mark to claim an exemption from withholding; and • the substance of the official Form W-4P instructions, including the caution on penalties for not paying enough withholding or estimated tax during the year. For periodic payments of pensions and annuities, the IRS also requires: • a line where the client can show the number of allowances on which withholding is computed; • a line for marital status; • a line to ask for an additional amount to be withheld from each payment; and • a space for the client’s signature. To prove that the form has been sent to the client on a timely basis, you should date the form before mailing and retain a copy in the client’s file. You should send two copies to the client: one to keep and, if a change is desired, one to return with signature to your bank. Election Clients may elect to withhold 10 percent or more on IRA distributions. Clients also may elect to waive with- holding. The election is authorized when the client signs IRS Form W-4P (or a substitute form). Once your client makes a withholding election, it is valid until revoked. You should retain a copy of the election in the client’s file. If the client does not elect out of withholding, you must withhold 10 percent of the IRA distribution. A client may revoke an election at any time by signing another Form W-4P. Many banks integrate the withhold- ing election into the withdrawal state- ment so that FormW-4P is available for each distribution. But when a client has established a series of scheduled pay- ments, you may send a FormW-4P to the client according to the notice frequency stated previously. Summary Compliance with the IRS withhold- ing notice provisions is all in the tim- ing and retention. This may be the best time to get withholding notices out to all of your clients who are scheduled for RMDs in December. It is also the right time to plan any other withholding notices that are needed to meet the IRA requirements.  O WN THE REAL ESTATE YOUR BUSINESS ALREADY PAYS FOR CEDCO S MALL B USINESS F INANCE C ORPORATION Colorado's SBA 504 Loan Expert™ 1175 O SAGE S TREET , S UITE 110 D ENVER CO 80204 ÊÊÊÊÊÊÊÊÊÊÊÊÊÊÊÊÊÊÊÊÊÊÊÊÊÊÊÊÊÊÊÊ Office Locations — Denver, Grand Junction, Colorado Springs 1 - 8 0 0 - 8 4 3 - 8 8 5 2 www.cedco.org • More stability for your operation • A stronger balance sheet • An asset to sell when you’re ready A S A LEADING SBA 504 LENDER WE MAKE IT EASY FOR YOU • Buy, Build, Remodel or Expand Real Estate • Purchase and install long-lasting equipment • Fast, expert processing - with low loan costs • Refinance LÕÃiÃÃ real estate ÀÊiµÕ«iÌ • 7iÊi`ÊÕ«ÊÌÊfxÊ\ÊLÀÀÜÊÕ«ÊÌÊfÓäÊÊ Üi VLi`ÊÜÌÊL>Êv>V} • Interest rate as low as 5.25%, fixed for 20 years • Down payments range from 10% to 20% • Most Small Businesses are Eligible S TREAMLINED P ROCESSING • Front Range and mid-mountains call Sean or Mary Jane 303-893-8989 • Western Colorado call Pat 970-243-1861 CEDCO Small Business Finance Corporation Your Best Source for SBA Real Estate Loans New Easier Qualification Uninterrupted access to money through a monthly SBA-backed bond auction Low fixed-rate financing Low down payments O WNERSHIP M EANS