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Do I need to file Form 5500-EZ for a solo 401k?

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  • spiritrider
    replied
    Reiterating, you are not just "switching custodians". Custodial services are only on the assets in the account(s).

    You will be amending the one-participant 401k plan. You will be adopting a new plan document by executing the amendment section* of the new one-participant provider's adoption agreement. You will also be adopting the plan provider's record keeping, IRS reporting etc...

    *In the amendment section you will enter the current/new plan effective dates the exact same plan sequence number as your original plan adoption agreement. Remember, this is the same plan, you are just changing providers.Therefore, you will use the original plan sequence number for any IRS communication.

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  • parachute
    replied
    Originally posted by spiritrider View Post
    A final Form 5500-EZ is due by the last day of the 7th month after terminating a 401k plan. This is required regardless if you have ever been required to file an annual Form 5500-EZ.

    It is important to understand that a 401k is a plan and not just an account like an IRA. The plan is an entity in and of itself, with its own lifetime. The plan is independent of the plan document/adoption agreement, trust (if applicable) custodian, accounts, etc...

    jacoavlu is correct. A 401k plan is not required nor should it be terminated to change the above. It is simply amended to change the plan elements. Not to mention, there is a 401k one-year successor plan rule. You can not adopt a new 401k plan for one year after terminating a previous 401k plan.
    I will be “switching” custodians sometime this summer for my Solo 401K Plan (which includes my Solo 401K and Solo Roth 401K) from TD Ameritrade to possibly ETrade (because TDA/Schwab will no longer support Solo Roth 401K).

    On the 5500-EZ i file in the future, do I then use the same Plan Number I have been using while TDA was the custodian?

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  • spiritrider
    replied
    A final Form 5500-EZ is due by the last day of the 7th month after terminating a 401k plan. This is required regardless if you have ever been required to file an annual Form 5500-EZ.

    It is important to understand that a 401k is a plan and not just an account like an IRA. The plan is an entity in and of itself, with its own lifetime. The plan is independent of the plan document/adoption agreement, trust (if applicable) custodian, accounts, etc...

    ​​​​​​​jacoavlu is correct. A 401k plan is not required nor should it be terminated to change the above. It is simply amended to change the plan elements. Not to mention, there is a 401k one-year successor plan rule. You can not adopt a new 401k plan for one year after terminating a previous 401k plan.

    Leave a comment:


  • Nervous_Water
    replied
    Good point. I will likely be structuring this as an amendment. So no tax forms for the plan this year it sounds.

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  • jacoavlu
    replied
    correct if plan assets less than limit no 5500 is required

    a change of custodian is not a termination. You might be amending the plan but you definitely should not terminate it, unless the business is actually terminating. In which case you should not expect to be starting a new plan

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  • Do I need to file Form 5500-EZ for a solo 401k?

    I want to make sure I am compliant with IRS rules for my wife's solo401k as I understand the tax penalties can be quite high. My wife has a solo401k with <250K in assets and she is the only plan member. Am I correct that she does not need to file IRS Form 5500-EZ (or 5500 or 5500-SF or any other forms)? If I terminate the plan because I am changing to a new custodian in 2022, am I correct that I *do* have to file 5500-EZ for the terminated plan next year?
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