Solo 401k Value Under $250,000 as of 12/31 but Over $250,000 During the Year

BACKGROUND:

Form 5500-EZ, Annual Return of One-Participant (Owners and Their Spouses) Retirement Plan applies to one-participant or “owner-only”  plans if the plan has assets of $250,000 or more at the end of the plan year.  Plans subject to the Form 5500-ez filing requirement include solo 401k plans and defined benefit plans.

QUESTION:

Please let me know if the form 5500-ez is still needed as the total amount is now below $250,000. So is it needed since at one point in 2021 the value of my solo 401k plan was over $250,000?

ANSWER:

A Form 5500-EZ is not required to be filed  if the balance of the solo 401k was under $250,000 during the plan year so as of 12/31.  It does not matter if the solo 401k was over $250,000 during the year prior to 12/31.
Note: If the solo 401k was closed during the year, a final Form 5500-EZ is required to be filed regardless if the value of the solo 401k plan was under $250,000 at time of closing or during the year.
For Form 5500-ez FAQs click here.

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About Mark Nolan

Each day I speak with energetic entrepreneurs looking to take the plunge into a new venture and small business owners eager to take control of their retirement savings. I am passionate about helping others find their financial independence. Having worked for over 20 years with some of the top retirement account custodian and insurance companies I have a deep and extensive knowledge of the complexities of self-directed 401ks and IRAs as well as retirement plan regulations. Learn more about Mark Nolan and My Solo 401k Financial >>

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