Last Updated on 12/22/2022
Depending on what stage you are in the solo 401k process, you basically need to be aware of the following 4 important solo 401k deadlines:
- Solo 401k Contribution Deadline
- Solo 401k Establishment Deadline
- Solo 401k Loan Payment Deadline
- Solo 401k Form 5500-EZ Filing Deadline
- Solo 401k Form 1099-R Filing Deadline
Solo 401k Contribution Deadline
Contributions to a Solo 401k plan must be made by your business tax return due date plus extensions.
The self-directed 401k contribution deadlines are driven by the type of entity sponsoring the self-directed solo 401k.
- If the entity type is a Sole Proprietorship, the annual solo 401k contribution deadline is April 17, or October 16 if tax return extension is filed.
- If the entity type is an LLC taxed as an S-Corporation (calendar year), the annual solo 401k contribution deadline is March 15, or September 15 if tax return extension is filed.
- If the entity type is an LLC taxed as a Partnership (calendar year), the annual solo 401k contribution deadline is March 15, or September 15 if tax return extension is filed.
- If the entity type is an LLC taxed as a Sole Proprietorship, the annual solo 401k contribution deadline is April 17, or October 16 if tax return extension is filed.
- If the entity type is a Partnership (calendar year), the annual solo 401k contribution deadline is March 15, or September 15 if tax return extension is filed.
- If the entity type is an S-Corporation (calendar year), the annual solo 401k contribution deadline is March 15, or September 15 if tax return extension is filed.
- If the entity type is an C-Corporation (calendar year), the annual solo 401k contribution deadline is April 17, or October 16 if tax return extension is filed.
Example
John Doe’s self-employed business is a calendar year S-corporation having a tax filing deadline of March 15; however, John timely files tax return extension, so he has until September 15 to make his Solo 401k contribution.
IMPORTANT
The annual solo 401k contribution limits as affected by the type of entity sponsoring the solo 401k plan.
- If the entity type is a Sole Proprietor, the starting figure for calculating the annual solo 401k contribution is line 31 of Schedule C.
- If the entity type is a C-Corporation, the starting figure for calculating the annual solo 401k contribution is W-2 income.
- If the entity type is an S-Corporation, the starting figure for calculating the annual solo 401k contribution is W-2 income.
- If the entity type is a Partnership, the starting figure for calculating the annual solo 401k contribution is Schedule K of Form 1065 line 14.
The 2022 Solo 401k Establishment Deadline
For those self-employed individuals looking to save on taxes for the 2022 tax year, a self-directed solo 401k may be just what the doctor ordered. However, time may be running out in order to preserve the right to make both employee and employer contributions. Reason being, unlike a SEP IRA which only accepts employer contributions (aka profit sharing contributions), a solo 401k allows for both employee and employer contributions. However, in order to allow for more time to make employee contributions to the solo 401k the solo 401k must be established/adopted by December 31, 2022. A solo 401k will meet the establishment deadline for 2022 for making employee contributions as long as the solo 401k plan documents are executed/signed by 12/31/2022.
Example 1: John Wayne who is self-employed and business type is a Sole Proprietor wants to Open a Solo 401k so that he can make employee pretax (salary deferral) or Roth Solo 401k contributions for the 2022 tax year by April 17, 2023; therefore, John must sign the Solo 401k plan establishment documents (Solo 401k adoption agreement, etc.) by December 31, 2022, but can wait until April 17, 2022 to open the solo 401k bank account(s) and to make the contributions.
Example 2: Same as above but John missed the December 31, 2022 solo 401k setup deadline; however, he sets up the solo 401k in 2023 by October 16, 2023. As a result, John will qualify to make employer profit sharing contributions but not Roth or pretax employee pretax contributions as the Plan had to be setup by 12/31/2022. However, John may still qualify to make voluntary after-tax solo 401k contributions for 2022 in 2023 if made by October 16, 2023 Click Here to learn more.
This new more liberal solo 401k plan opening deadline was made possible by the Setting Every Community Up for Retirement Enhancement (SECURE) Act. To learn more visit here.
Solo 401k Loan Payment Deadline
Solo 401k loan payments are due either monthly or quarterly, determined at time of initial Solo 401k loan issuance. However, a grace period is available for missed payment. The grace period calls for the late payment to be made by the last day of the quarter (3 month) following the quarter in which the loan payment was due.
Example: On January 23 Jane Doe processed a Solo 401k loan amount of $20,000 having 15 year term. Since Jane is using the borrowed funds towards the purchase of her primary residence, the Solo 401k participant loan can exceed the standard 5 year period. Further, Solo 401k loan is payable monthly with the first fixed loan payment amount of $370 due on February 23. Therefore, if Jane is unable to make her scheduled loan payment by the February 23 due date, which is the first quarter, Jane must make the missed payment by June 30, which is the last day of the quarter following the quarter in which the missed loan payment was due.
Solo 401k Form 5500-EZ Filing Deadline
The Solo 401k business owner in conjunction with the Solo 401k provider may have to file an annual return/report form by the last day of the 7th month after the Solo 401k plan year ends. Form 5500-EZ is used by the self-employed business owner to report on a yearly basis the total value of the Solo 401k plan; however, Form 5500-EZ does not need to be filed until the Solo 401k plan total assets exceed $250,000. Lastly, all Solo 401k Plans must file a Form 5500-EZ for the final plan year to show that all plan assets have been distributed. CLICK HERE to read our FAQ page on Form 5500-EZ.
Solo 401k Form 1099-R Filing Deadline
Anytime a plan participant or beneficiary takes a distribution from his or her self-directed solo 401k, IRS reporting requirements apply. 1099-R reporting also applies to in-plan Roth 401k conversions. Payers must send a Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc., to the IRS and to the individual receiving the distribution. The form is due to the IRS by February 28.
