IRS Form 5500 EZ: Tax Filing Requirements for Solo 401k Plan

Form 5500 EZ Instructions

Individual 401(k) Plan (also known as Solo 401k or Owner-Only 401k) is considered tax-exempt according to the IRC Section 401.  Therefore, the filing of state or federal income tax is not required. The only form required to be filed is 5500 EZ.

Form 5500 EZ Filing Requirements

Individual 401(k) Plan was designed for self-employed individual or small business owner with no full time employees.  It provides simple and low cost retirement solution to those who qualify.  This plan is very simple to manage and typically does not have annual filing requirements unless the Solo 401k Plan balance exceeds $250,000 in assets (including all liquid cash and non-liquid assets).  If this is the case, a short 2-page information return (Form 5500-EZ) is required to be filed with the IRS.  The IRS Form 5500 EZ is to be used by certain one-participant plans, such as Solo 401(k), to report to the IRS required plan information.

Those Solo 401(k) Plans, in which combined value of assets is over $250,000, the administrator of the plan is required to file Form 5500 EZ with the IRS and to be filed by July 31^st.  The Form does not have to be e-filed and can be filed manually with the IRS.  IRS Form 5500 EZ is easy to complete.  Instructions for completing the form are available on the IRS website.

For the purpose of IRS Form 5500 EZ, an owner-only retirement plan means a qualified retirement plan that is not subject to yearly ERISA filing requirements.  It covers the owner, spouse of the owner, as well as partners and their spouses.

If the Solo 401(k) Plan balance is less than $250,000 by December 31^st, the IRS Form 5500 EZ does not have to be filed (exception applies if the plan was terminated).

Form 5500EZ doesn’t have to be filed if there are no rank in file employees and the assets are under $250k; however, failure to file a 5500EZ also means the statute of limitations NEVER STARTS RUNNING on the plan. We recommend to file Form 5500EZ regardless of this allowable exclusion; starting the statute of limitations running is just a good idea.

The IRS Form 5500 EZ is to be filed as follow:

Department of the Treasury
Internal Revenue Service
Ogden, UT 84201-0020

Related Search Terms:

• IRS Form 5500 EZ 2012
• Form 5500 EZ Instructions
• Solo 401k Filing Requirements
• Solo 401k Tax Reporting Requirements
• Solo 401k 250,000 limit