Vanguard Exits Individual 401k Business and Sells to Ascensus-Impact and Options for Solo 401k Account Holders

Yes, as the existing i Roth 401k would get restated to our solo 401k plan. A restatement results in keeping the original plan effective date; hence why we ask for it on our online application.

Yes, you will be able to use Fidelity Investments to hold the Roth 401k funds and we will assist you in opening these brokerage accounts with Fidelity as part of the solo 401k restatement process.

When transferring a Solo 401k account from Vanguard to MySolo401k and setting up a new Fidelity brokerage account, the account would be registered under the Solo 401k owner's name. We assist in preparing all necessary paperwork for opening new accounts at Fidelity and for transferring cash and assets from the existing Vanguard accounts to the new Fidelity accounts. Solo 401k owners have exclusive access to their accounts at Fidelity. Funding after the initial transfer can be done by logging into the Fidelity account and initiating an ACH bank transfer. For redemptions post age 59.5, withdrawals can be made via check or wire, and these transactions are reportable events which we handle by providing the necessary 1099 reporting at no additional charge. Fidelity would provide regular brokerage statements, while MySolo401k would provide the ongoing Solo 401k compliance support.

Correct, the ongoing solo 401k contributions will be made directly to the Fidelity brokerage accounts by you as the trustee of the plan and they can be made electronically (ACH) from your business bank account. We don't hold our clients funds; instead, the client decides on the depository financial institution to hold the solo 401k funds.

Yes,  you can and by your business tax return due including your business tax return extension.n max out the contributions now or after you have restated your solo 401k plan.

Yes, you can and by your business tax return due including your business tax return extension.

The solo 401k holding accounts (the bank/brokerage accounts) serve to track the contributions in addition to reporting them on your personal and/or business tax return

Correct. Whether your use Schwab or Fidelity ivnestments, for example, for the solo 401k brokerage accounts, you would use that brokerage firms website and only you will have access to the solo 401k funds.

You can  locate the original plan effective date from the Vanguard i401k application (aka Adoption Agreement), or by calling Vanguard. Also, if your plan has been filing a Form 5500-ez, you can get the original plan effective date from 1c for that form.

The solo 401k that we offer allows for the funds to be held in separate brokerage accounts at Fidelity or Schwab, for example.

For example, if the solo 401k plan only has one participant, 1 (one) to 3 (three) separate bank or brokerage accounts may be needed depending on whether or not the participant chooses to make all three contribution types (pretax, roth and voluntary after-tax) or chooses to convert pretax or voluntary after-tax funds to the Roth solo 401k bucket.

Subsequently, you can convert the pre tax solo 401k funds to the Roth solo 401k through an in-plan conversion where the funds and/or securities are internally moved from the pre tax solo 401k brokerage account to the Roth solo 401k brokerage account.  You would then complete our in-plan conversion form (https://www.mysolo401k.net/pretax-to-roth-solo-401k-in-plan-conversion-form/) so that we can collect the necessary information to issue the Form 1099-R.

See the following procedure for example if you use Fidelity Investments for the solo 401k brokerage accounts. https://www.mysolo401k.net/solo-401k/how-to-process-a-fidelity-investments-conversion-of-pretax-solo-401k-funds-non-prototype-account-to-a-roth-solo-401k/

The auto contribution feature in our Solo 401k plans is set up to allow Solo 401k owners to qualify for a $1,500 tax credit. The Solo 401k owner can opt out of the default contribution amount in order to allow the Solo 401k owner to contribute at any amount or schedule they prefer, or even opt not to contribute at all, and still be eligible for the tax credit.

Yes, our Solo 401k plans support both Employee and Employer Roth contributions, as well as voluntary after-tax contributions which can be utilized for Mega Backdoor Roth strategies.

For Solo 401k plans, the pro-rata rules apply at the account level. This means that Solo 401k owners can move money from their voluntary after-tax Solo 401k sub-account to a Roth Solo 401k or Roth IRA, even if they have other pre-tax or Roth funds in their Solo 401k. Click here to learn more.

Our Solo 401k plans support rollovers out of the plan to both regular and Roth IRAs, provided the rollover requirements are met, such as the Solo 401k owner being over age 59.5 or meeting other triggering events or exceptions like voluntary after-tax contributions. We handle the required 1099-R reporting as part of our service at no additional charge. Click HERE to learn more.

Yes, you would need to obtain a separate EIN specifically for the Solo 401k plan trust, even if you already have an EIN for your existing business. We would obtain the EIN for the solo 401k as part of the restatement process. Having a separate EIN for the Solo 401k plan helps the IRS clearly identify which funds and income are associated with the tax-deferred retirement account versus your taxable business incom. When income like interest is reported to the IRS under the Solo 401k plan's EIN, it signals to the IRS that this income is growing tax-deferred within the retirement account.

When opening brokerage accounts at Schwab for your Solo 401k, you will typically need to open multiple brokerage accounts rather than just one account. Each brokerage account is opened in the name of the solo 401k using the plan's EIN and used for tracking different contribution sources - one for pre-tax funds, one for Roth funds if applicable, and one for voluntary after-tax funds if applicable. This setup of separate Schwab brokerage accounts for each participant and contribution source (pre-tax, Roth, after-tax) is how the different Solo 401k contribution types are properly tracked and accounted for. If applicable, your spouse would also need their own separate participant account if they are a participant in the Solo 401k plan. We would assist in opening each brokerage  account at Schwab as part of the solo 401k setup process.