Solo 401k Checkup
Midyear Checkup
Review the following for your Solo 401k each year
Active self-employment
An active, ongoing self-employment business is required for the Solo 401k.
How to choose a business to adopt your 401k plan
Check your plan documents to confirm that your current, active self-employment business is reflected.
Let Sense Financial know of any changes to your self-employment, including address updates.
Addition of part-time employees
The Solo 401k is for self-employed business owners without full-time employees, other than the owner and their spouse.
Hiring part-time employees can affect your eligibility for the Solo 401k.
If you have part-time employees, check your eligibility and make sure your plan documents have been updated.
Transfers into the Solo 401k from a plan with QJSA requirement
Transfers from a plan with a QJSA requirement, like a defined benefit or money purchase plan, into your Solo 401k should be reflected in your plan documents.
QJSA requirement and the Solo 401k
If you have transferred funds from a defined benefit plan into your Solo 401k, check your plan documents for the above.
Those funds must also be tracked by you within your Solo 401k because they are still subject to QJSA requirements, unlike the other funds in your Solo 401k.
Automatic enrollment in the Solo 401k
Your Solo 401k now includes automatic enrollment, which allows you to file for a $1,500 tax credit.
Automatic enrollment in the Solo 401k
Automatic enrollment requires you to file for the tax credit for its first year, distribute an annual notice to each employee every year, and make an employee election or contribution for each employee every year.
Updates to your plan documents
As plan administrator, you are responsible for ensuring that your plan documents reflect your current situation. Sense Financial is your document sponsor and must be notified by you if your situation changes.