Tax Filing Requirements for the Solo 401k Plan
Pop Quiz:
Tax filing is always required for a Solo 401k plan.
Answer: No, you only need to file taxes when your account balance reaches a certain value.
Many Solo 401k plan owners are wondering about the tax filing requirements for their Solo 401k plan. Sense Financial answers their questions and explains about the Solo 401k Tax Filing Requirement in this Solo 401k Quick Tip Video:
Tax Filing Requirements for the Solo 401k Plan
The Solo 401k is considered tax-exempt according to the Internal-Revenue-Code Section 401. Therefore, the filing of state or federal income tax is not required. This plan typically does not have annual filing requirements, unless Plan-balance exceeds $250,000 in assets. This includes all liquid cash and non-liquid assets. If this is the case, a short 2-page information return (known as Form-5500EZ) is required to be filed with the IRS by July 31st. If the plan balance is less than $250,000 by December 31st, the filing is not required (except when plan was terminated).