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

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 on behalf of the plan is Form 5500 EZ.

An Owner-Only 401k is a qualified retirement plan that is not subject to yearly ERISA filing requirements. The plan covers the owner, spouse of the owner, as well as partners and their spouses.

Do I need to file?

The Individual 401(k) Plan is designed for self-employed individual or small business owners without any full time employees. The plan is simple to manage with one possible annual filing requirement.

• If the plan balance is $250,000 and above at plan year end, Form 5500-EZ is required
• If the plan balance is under $250,000 at plan year end, the form is not required
• If the plan has been terminated, the form is required for the final plan year

We recommend all clients to file this form, even if not required. Filing starts the statutes of limitations on the plan which is just a good idea.

What do I need to file?

The form is a short 2-page information return that is filed with the IRS. The return is used for certain one-participant plans, like the Solo 401k, to report plan information to the IRS.

The form is easy to complete and can be filed via a paper form that is mailed to the IRS. Instructions for completing the form are available on the IRS website.

When do I need to file?

Once the plan balance exceeds $250,000 in assets (including all liquid cash and all non-liquid assets), the plan administrator is required to file the form with the IRS by the last day of the seventh month following the plan year end. The plan year end is, for most, December 31st. This would mean a July 31st deadline for the form.

If your plan year end falls on another date, you will need to calculate the deadline for your plan filing. 

Where should the return to be sent to?

The IRS instructions give the following address for regular postal mail. We strongly recommend using certified or registered mail with proof of mailing:

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