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  • First 5500

    Our single participant solo 401k passed the $250,000 mark in December so I’ll be filing the first 5500 this week.

    i’ve read the White Coat investor post on filling out the form, and used the figures from Vanguard necessary to do so. After I filled it out, I gave the first draft of the form to my Cpa to check over, but I haven’t heard anything in a month and it looks like I’ll have to submit it without their input.

    I’d appreciate knowing anything that you wish you’d known when filing the first 5500. I’m assuming I can file a 5500ez, since it’s a single participant plan (spouse and myself only). I’ve never used the efast2 system; is it fairly self explanatory? Or is it better to mail the form?

    thanks for any help offered. It seems pretty straight forward; I’m just a little nervous because it’s the first one I’ve submitted and don’t want to make a mistake





  • #2
    Why hasnt your cpa gotten back to you? I'd be looking for a new one unless there is a good reason.

    Sorry no help on 5500, not lucky enough to have to file one.

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    • #3
      I would file and use the new option to file electronically. The latter gives a confirmation of a timely submission.

      If you followed WCI's guidance, you should be fine. Your CPA might not be responding because they don't have a clue. We have seen time and again that many CPAs are not well-versed in 401k plan compliance.

      The serious penalties are for late filing or failure to file. If the IRS finds a discrepancy, they will simply ask you to correct it.

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      • #4
        Thank you. Do I use the efast2 system or Ifile? It looks like the efast2 requires a credentialing process before filing.

        I’m wondering if electronically filing the 5500ez is something I can do myself? Or what type of professional do I hire to help since my Cpa is apparently unavailable?

        Comment


        • #5
          Originally posted by No1ofconsequence View Post
          Thank you. Do I use the efast2 system or Ifile? It looks like the efast2 requires a credentialing process before filing.

          I’m wondering if electronically filing the 5500ez is something I can do myself? Or what type of professional do I hire to help since my Cpa is apparently unavailable?
          https://www.efast.dol.gov/iFileLanding/Landing.html
          One and the same. It is simply a registration process, not credentialing as you might think of it.

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          • #6
            What is form 5500? Who has to file? I passed 250k a few year ago and didnt file anything. Is this something our group (401k) accountant would have done?

            Comment


            • #7
              Originally posted by Tim View Post
              https://www.efast.dol.gov/iFileLanding/Landing.html
              One and the same. It is simply a registration process, not credentialing as you might think of it.
              I would add, you register at the EFAST2 site, but actually use IFILE to actually file.

              EFAST2 filing is only done by EFAST2 approved software. Think of this as like using TurboTax and other approved software filing tax returns and the Free File Fillable Forms website for individuals.

              I don't know about you, but I wouldn't be providing any tax or 401k filing information without secure logins.

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              • #8
                Originally posted by STATscans View Post
                What is form 5500? Who has to file? I passed 250k a few year ago and didn't file anything. Is this something our group (401k) accountant would have done?
                Form 5500-EZ is only for one-participant 401k plans (AKA Solo 401k, Individual 401k, etc...) when the year-end balance in all accounts of all participants is > $250K. There are significant penalties (up to $250k) for late filing or failure to file. Luckily there is a penalty relief program that can limit your penalties to $500/year for a maximum $1500.

                This has nothing to do with an individual participant in an ERISA 401k plan with eligible non-owner/spouse employees. However, if your group has an ERISA 401k -plan and has not timely filed For 5500 or Form 5500-SF, then your group's plan has a serious problem.

                Comment


                • #9
                  Originally posted by STATscans View Post
                  What is form 5500? Who has to file? I passed 250k a few year ago and didnt file anything. Is this something our group (401k) accountant would have done?
                  To add to spiritrider’s response, your plan administrator (not CPA) has hopefully taken care of filing the form. You can double-check, but I bet you are worrying unnecessarily.

                  To the OP, 5500 EZ is simply a reporting form and the main problem you are likely to have is forgetting to file on time. No reason to put it off until July.

                  If you know your CPA received your message and hasn’t gotten back to you for a dang month, that’s unacceptable and disrespectful. You know what to do next.
                  Our passion is protecting clients and others from predatory and ignorant advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

                  Comment


                  • #10
                    Originally posted by spiritrider View Post
                    Form 5500-EZ is only for one-participant 401k plans (AKA Solo 401k, Individual 401k, etc...) when the year-end balance in all accounts of all participants is > $250K. There are significant penalties (up to $250k) for late filing or failure to file. Luckily there is a penalty relief program that can limit your penalties to $500/year for a maximum $1500.

                    This has nothing to do with an individual participant in an ERISA 401k plan with eligible non-owner/spouse employees. However, if your group has an ERISA 401k -plan and has not timely filed For 5500 or Form 5500-SF, then your group's plan has a serious problem.
                    Ugh... I did not know about this either. I have a CPA do my taxes so I am hoping he did it! I will go look. Does this just have to be done once? I did a roll over of about $300K from an employer 401K into my i401K, so that is when he should have filed it, if it is a one time only form. I'll go pull the taxes from that year. Do you do it every multiple of 250K? I have not kept him informed of the account balance...

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                    • #11
                      PSA, one-participant 401k plan sponsors should never rely on their tax preparer for plan compliance.

                      Form 5500-EZ is required every year a one-participant 401k plan year-end balance is > $250K. 401k plan compliance has nothing to do with your tax returns. Form 5500-EZ is filed by the one-participant 401k plan sponsor's administrator (you and you unless you have a TPA), has nothing to do with your tax return, has a separate due date 7/31 and is mailed to a different address than your tax return.

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                      • #12
                        Thank you for the clear explanations Tim, Spiritrider, and jfoxcpacfa.

                        I was able to electronically submit my first 5500ez this morning. Weird website; trickiest thing was figuring out how to actually submit it once the form was filled out, but I got it done.

                        and I put a reminder in my phone for next year.
                        Last edited by No1ofconsequence; 06-07-2021, 05:21 PM.

                        Comment


                        • #13
                          Originally posted by No1ofconsequence View Post
                          Thank you for the clear explanations Tim, Spiritrider, and jfoxcpacfa.

                          I was able to electronically submit my first 5500ez this morning. Weird website; trickiest thing was figuring out how to actually submit it once the form was filled out, but I got it done.

                          and I put a reminder in my phone for next year.
                          Good for you. Your CPA was not necessarily responsible for filing, unless it was part of your agreement, but it whb a nice courtesy to proactively notify you of the responsibility. A CPA who is responsible only for doing your taxes may not be the best choice for a high-income professional with anything beyond a 2 W2 return, at least impo. I strongly believe year-round interaction is vital to providing the advice you need before the year is closed in order to give you the opportunity to plan together, consider your options, and take appropriate action. Again, jmpo, and, of course, that kind of service is far cheaper. What are your priorities?
                          Our passion is protecting clients and others from predatory and ignorant advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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