If you currently have a solo 401k through Edward Jones and are now seeking change it to a self-directed solo 401k plan, here are some of the reasons to consider making the move.
- To gain Solo 401k checkbook control
- To invest in alternative investments (e.g., real estate, precious metals, Notes, tax liens, cryptocurrency, etc.)
- To gain compliance support with Form 5500-EZ and Form 1099-R preparation.
- To gain access to Solo 401k Loan (borrow from Solo 401k)
- To gain access to making all three contribution types: pretax, Roth, and after-tax
Process:
- New Solo 401k Plan Documents (vs. Edward Jones “Do it yourself/DIY” plan documents)
- List the original plan effective date
- Obtain 401K EIN
- Close Existing Account and Open New Account(s)
- Pre-Tax, Roth and Voluntary After-Tax
- Spouses
- Edward Jones QRP Distribution Request & Letter of Acceptance
- Not Required: No Final 5500-EZ or 1099-R
Additional Considerations:
- If assets exceed $250K:
- Have you been filing Form 5500-EZ?
- If not, need to file under the IRS Correction Program
- Do you wish to keep investments (in-kind transfer)?
- Confirm that new brokerage account provider offers those funds
- Are there multiple participants (e.g. spouses)?
- Segregate the funds and transfer into separate sub-accounts
- Consider filing an extension to ensure plenty of time to make contributions
Self-directed Solo 401k –
Compliance Support
- Form 5500-ez
- If your solo 401k plan balance exceeded $250,000 as of December 31, a Form 5500-EZ is due to the IRS by July 31.
- 1099-R
- Distributions, Rollover, In-Plan Conversions
- Solo 401k IRS Required Plan Updates
- IRS-required plan updates with the next required update occurring in 2022
- Contribution Calculation (including Mega Backdoor Roth)
- Loan Document Preparation
- Alternative Investments
- Account Setup
- Bank, Brokerage, Crypto exchange, etc.
