Solo 401k TPA question….

[Hogfanmd]

Read a lot about the solo 401k on here and the MBDR capabilities and considering changing from sep to solo 401k this year. The current custodian/bank I have my SEP with is willing to administer a solo 401k for me with MBDR if I can provide them with the proper plan documents to do so. Would this remove the need for a TPA??? My current institution allows for real estate investments which I have in my sep, and I want to continue like investments in a solo 401 k. that’s why I’d like to continue with the same custodian if changing from SEP to solo 401k if possible.

[GasFIRE]

You can certainly purchase plan documents from a vendor but who confirms the correctness of contributions and timely files 1099-R and Form 5500 if necessary? Is your institution going to provide these and or simply act as custodian of the account? You are the owner/trustee and are ultimately responsible. Personally, I think a knowledgeable TPA provides a valuable service in making sure all these items are managed properly.

[Hogfanmd]

I’ve talked to my accountant about helping complete form 5500 once over the 250,000.00 value threshold. I assume the bank / custodian would file 1099-r as they currently report all applicable forms for my sep. I participate in 403b with match at my main employer, not my LLc, and Max the employee pre tax withholding there so there would be no employee pre tax contributions to a solo 401k. My understanding is that my employer profit share / employer contribution to the solo 401k is essentially the same calculation as it is on the SEP that I already calculate and my after tax employee contribution to then place in MBDR can be any amount but can’t exceed either my W2 compensation from my LLC or the IRS max of 40.500.00 for 2022 which ever is less.

again I’m not opposed to the TPA but the places I’ve checked mainly only offered traditional type investments

[GasFIRE]

I assume the bank / custodian would file 1099-r as they currently report all applicable forms for my sep.

I would not assume this. The account type for custom plans is typically a trust account (sometimes called non-prototype). For example, my old solo 401k plan at Fidelity was transferred in kind to a non-prototype trust account also at Fidelity when I decided to switch to a custom plan to do the MBDR. This was a brokerage platform only and they no longer provided any accounting/filing services for this account. That became the responsibility of the trustee, me. I delegated this to my TPA but I am ultimately responsible as I sign all the forms, including the 1099-Rs that they file on my behalf. If you use a custom plan, I would ask the bank specifically what services they will provide for you. It may be less than you think.

[Hogfanmd]

Who would you recommend for plan writer, TPA that can use and continue with my current custodian??? Will TPA take care of form 1099 and 5500?? I’m pretty comfortable with amounts to contribute both employer and employee after tax but need experience on the timing of the after tax contribution/ MBDR conversion and tax forms.