Solo 401k contributions.
It is now March. Can I make a salary deferral for my solo 401k relating to 2010? Right now, the value of my account is less than $250,000. So, no filing is required. But, if I make this late salary defferal contribution for 2010, can I participate in the DOL voluntary compliance program? I am assuming I would have to file form 5500. Once I file one form 5500, is it required to file in years after this year?
Permalink Submitted by Joy Dorman on Tue, 2011-03-29 00:01
The deadline for establishing a solo 401k is Dec 31st, but contributions can be made up until the extended due date. When you make your contribution should not affect your need to file a 5500. If your balance is still under $250k, you don’t need to file the 5500.
Permalink Submitted by mk foss on Tue, 2011-03-29 01:46
Actually when you report plan assets on the 5500-EZ, you include the 12/31 actual fair market value PLUS the contributions to be made for that year by the extended due date of the return. The filing requirement if reached for one plan of the employer requires that a 5500-EZ be filed for other plans of the same employer even if they don’t have assets of $250,000. If the assets go down below $250,000 you don’t have to file each year EXCEPT you must file in the final year of the plan even if you never had to file before.
You must file 5500-EZ for a plan that just covers the business owner and a spouse. The Form 5500 is required if there are other employees and is a more complicated form.
This is all based on the 2009 Form 5500-EZ instructions. The 2010 instructions are not out yet.