5500-EZ, SF, 990, and $%!?

The 5500-EZ (designed for Solo 401k Plans) is about the simplest and most user friendly IRS form around. Let’s cover what you need to know to handle it: What is it? ...and when is it due?

It’s a report (not a tax) due by July 31st each year for Solo 401k Plans that meet one of the following conditions:

  • Your Plan has more than $250,000 in assets (ignoring liabilities; so if you have a $300,000 rental with a $200,000 mortgage in your Plan it still files).
  • Your Plan closed the previous year (so if you wrapped up your Plan anytime during 2017, then July 31st 2018 would be when the Plan’s final 5500-EZ would be due regardless of how much money was in it when it closed).

Anyone on our email list (customer or not) will get reminders about it throughout the year so you don’t worry about it when you don’t need to; and get it done when you should. Take a second and signup now (if you haven’t joined already). If you’re a client we’ll also automatically provide a sample 5500-EZ each year filled out including our Plan Codes so you (or your CPA) can be done with the whole thing in less than 15 minutes each year.

Ready to see what this thing really is? Click. It’ll open in a new window: Example 5500-EZ ...and if you didn’t say ‘yes’ to either of the above conditions? Then you’re very likely ‘form free’. They’re just that easy to run. Feel free to email us the details of your situation if you’d like thoughts your specific compliance situation.

(Fun fact: The average Solo 401k has less reporting than an IRA; and pays less in taxes and penalties for mistakes than IRAs in virtually any circumstance.) *** ...and the top three questions we get in the 'Do I need to file a return?' category *** Have rental property in your Plan? These don't usually require a return unless it's a short-term rental (like on Airbnb or VBRO). Use an LLC inside of your Solo 401k? Double check with your CPA if you need to fine a return for your state or for the 'disregarded entity' for any reason, but few do. Buy or sell interest in a business, precious metals, distribute assets to yourself personally or ??? Few things the Plan does can generate the need for a return or reporting paperwork other than the listed items. Our experts can help with your specific situation, or we can work with your tax adviser, if you want to double check.

*If you *don’t* have a Solo 401k, but have a Group 401k or a Defined Benefit Plan instead, you’ll need a full 5500… it’s a beast and (very much) worth talking with us or your CPA/TPA about well ahead of time. **If your Solo 401k (or IRA) has ‘active’ income then it will likely need to file a form 990; be sure to talk with with your Plan provider or tax professional if you think this might apply to you. Deductions, expenses, depreciation, all this stuff can apply; but acting before the end of the year may save you serious money.

Thanks for reading. We appreciate it. Want a few links to send your CPA? Make sure you’re not reading before operating heavy machinery and click away on these IRS links: Solo 401k Plans, All things 5500,  990 Central. (Really, they keep these pages both current and (fairly) clear. Just email us if you have any questions on them.)