How to fill out a 5500-EZ for your Solo 401k

How to fill out a 5500-EZ for your Solo 401k
Follow along in this handy guide on how to fill out and file your 5500-EZ form for your Solo 401k.
DISCLAIMER: Please note that this is not and should not be considered a replacement for tax,
legal or investment advice. Always consult your tax advisor, CPA and/or general counsel
before filing.
What is the 5500-EZ?
From the IRS: "Form 5500-EZ is used by one-participant plans and foreign plans that are not
subject to the requirements of section 104(a) of the Employee Retirement Income Security Act of
1974 (ERISA) and that do not choose to file Form 5500-SF electronically to satisfy certain annual
reporting and filing obligations imposed by the Code." (Source)
In other words, the 5500-EZ form is used to report your Solo 401k annual holdings.
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When is the 5500-EZ due?
The 5500-EZ must only be filed if the previous calendar year had more than $250,000 in total
assets in your Solo 401k plan. The 5500-EZ must then be filed by July 31st of the following
calendar year.
For example, if on December 31st, 2014 your Solo 401k plan had more than $250,000 in total
assets, then you would need to file your form 5500-EZ by no later than July 31st, 2015.
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Step-by-step guidelines on filling out the 5500-EZ form
Follow along to hear suggestions on how to successfully complete the 5500-EZ. Make sure to
share these suggestions with your CPA and/or tax preparer and always seek professional
guidance in the area of tax, legal or investment advice.
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Part I Annual Return Identification: Suggestions and Guidelines
Most plan years are from January 1st to December 31st. This information can be found on page 2
of the Adoption Agreement, item 7, “Plan Year.”
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Check box A(1) if this is the first filing for this plan. Do not check this box if you have ever filed
for this plan.
Check box A(2) if you are filing an amended Form 5500-EZ to correct errors and/or omissions
in a previously filed annual return for the current plan year.
All one-participant plans should file a return for their final plan year indicating that all assets
have been distributed. Check box A(3) if all assets under the plan have been distributed and
this is the filing for the final plan year.
Check box A(4) if this form is filed for a period of less than 12 months. Show the dates at the
top of the form.
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Part II Basic Plan Information: Suggestions and Guidelines
1a. Name of Plan - The name of the plan can be found on page 1 (the first full page) of the
Adoption Agreement.
1b. Three digit plan number - Found on page 2 of the Adoption Agreement, item 5. This number
should be the same for every year the 5500-EZ is filed for this particular 401k plan.
1c. Plan effective date - Located on page 1 of the Adoption Agreement (most likely January 1st of
the year the plan was set up).
2a. Employer's name and address:
Employer's name - Listed on page 1 of the Adoption Agreement
Employer's address - Listed on page 2 of the Adoption Agreement
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In care of name - This can be the business owner (which should also be you, the plan participant)
2b. Employer Identification Number – This is the employer EIN found on page 2 of the Adoption
Agreement, item 3, “Employer Tax ID.”
2c. Employer’s Telephone Number – On page 2 of the Adoption Agreement, Item 2.
2d. Business code – 6 digit code found on page 3 of the Adoption Agreement, item 16, “Business
Code.” This is usually the same business code (NAICS) you entered when you set up your Solo
401k plan
NOTE: If your adopting employer is a Sole Proprietorship, you must obtain an EIN from the
IRS. Social Security Numbers are NOT allowable on the 5500-EZ.
3a. Plan administrator – Page 2, item 10 of the Adoption Agreement. Enter “Same” if the
administrator and employer are the same.
3b. Administrator’s EIN – Page 3, item 11 of the Adoption Agreement, “Plan Administrator ID
number.” Typically, you can repeat the same EIN entered in 2b (the section above)
3c. Administrator’s telephone number – Displayed under item 10 of the Adoption Agreement. This
is usually your telephone number.
NOTE: This section is optional and may be left blank if 3a is filled in as "Same"
4. Enter the name of the 401k trust. This is optional. List the name of the trust and the trust EIN
exactly as listed on your EIN letter from the IRS (found on your Solo 401k dashboard)
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5. This section is optional and only needs to be filled out if the EIN has changed, or if you have a
new adopting employer to your 401k plan since you last filed the 5500-EZ. Further questions
should be directed to your CPA and/or tax preparer to ensure filled out correctly.
6a. Enter total number of participants in plan in spaces provided. If you alone participate in your
Solo 401k plan (no spouse), then put "1". If your spouse is participating in the plan, or if your
adpting employer has a second business owner, then enter "2" (or greater, if there are more
businesses owners in your adopting employer).
6b. Enter total number of participants in plan in spaces provided. If you alone participate in your
Solo 401k plan (no spouse), then put "1". If your spouse is participating in the plan, or if your
adpting employer has a second business owner, then enter "2" (or greater, if there are more
businesses owners in your adopting employer).
Part III Financial Information: Suggestions and Guidelines
7a(1) Enter the “Total Plan Assets”. This number should be greater than $250,000. Use whole
dollars only (no cents). Please see below for a definition of "Total Plan Assets"
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7a(2)from last year; if filed Form 5500-EZ previously. Otherwise, this figure includes “Total Plan
Assets” as: rollovers, unrealized gains and losses such as appreciation/depreciation in assets. It
also includes specific assets held by the plan at any time during the plan year (for example,
partnership/joint venture interests, employer real property, real estate (other than employer real
property), employer securities, loans (participants and non-participant loans), and tangible
personal property). Please do not include the annual contribution amount.
7a(2) Enter end of year “Total Plan Assets” as listed above. Do NOT include contributions in this
section
7b(1) Enter “Total plan liabilities”. From the IRS instructions on completing the 5500-EZ: "Liabilities
include but are not limited to benefit claims payable, operating payables, acquisition
indebtedness, and other liabilities. Do not include the value of future distributions that will be made
to participants." (Source)
7b(2) Enter end of year “Total plan liabilities” as listed above.
7c(1) Enter “Net plan assets” . To find this number, subtract 7b(1) from 7a(1) and enter in the total
amount.
7c(2) Enter end of the year “Net plan assets” . To find this number, subtract 7b(2) from 7a (2) and
enter in the total amount.
DEFINITION by the IRS of Total Plan Assets
'“Total plan assets” include rollovers and transfers received from other plans, unrealized gains and
losses such as appreciation/depreciation in assets. It also includes specific assets held by the plan
at any time during the plan year (for example, partnership/joint venture interests, employer real
property, real estate (other than employer real property), employer securities, loans (participant
and non-participant loans), and tangible personal property). Enter the total amount of plan assets
at the beginning of the plan year in column (1). Do not include contributions designated for the
2014 plan year in column (1)." (Source)
Lines 8a and 8b. Enter the total cash contributions received and/or receivable by the plan from
employers and participants during the plan year. Since you are both the emplyer and participant,
only enter the contributions on one line.
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Line 8c. Enter the amount of all other contributions including transfers or rollovers received from
other plans valued on the date of contribution.
Part IV Plan Characteristics: Suggestions and Guidelines
Plan characteristics codes can be found on page 6 of the 5500-EZ instructions:
http://www.irs.gov/pub/irs-pdf/i5500ez.pdf
Codes applicable to the most Solo 401k plans:
2E - profit sharing
2J - section 401(k) feature
3B - plan covering self-employed individuals.
3D - pre-approved pension plan
It may also be the opinion of your tax advisor that the following codes are applicable to your Solo
401k depending on your use of the plan:
2R - participant-directed brokerage accounts
2S - plan provides for automatic enrollment in plan that has employee contributions deducted from
payroll.
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Part V Compliance and Funding Questions: Suggestions and Guidelines
Line 10. Check “Yes” if the you created a particiapnt loan during the previous calendar year. You
must also check "Yes" if you had an already existing outstanding loan during the reporting
calendar year. Make sure to enter the amount outstanding as of the end of the calendar year.
Line 11. Check “No” since the Solo 401k is NOT a defined benefit plan
Line 12. Check "No" since the Solo 401k is not subject ot teh minimum funding requirements.
12a - Not applicable
12b - Not applicable
12c - Not applicable
12d - Not applicable
12e - Not applicable
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Sign and complete your 5500-EZ form. Like with regular income taxes, if you had a financial
professional prepare the 5500-EZ form for you, make sure the preparer name, address and
telephone number are included.
Extensions for the 5500-EZ
You are allowed a one-time extension on filing your 5500-EZ by completing form 5558.
From the IRS instructions:
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Applications for extension of time to file Form 5500, Form 5500-SF, Form 5500-EZ, and/or Form
8955-SSA that are filed on or before the return/report’s normal due date on a properly completed
Form 5558 will be automatically approved to the date that is no later than the 15th day of the third
month after the return/report’s normal due date. (SOURCE)
Where do I mail my completed 5500-EZ?
Mail your completed and signed 5500-EZ form to:
Department of the Treasury
Internal Revenue Service
Ogden, UT 84201-0020
DISCLAIMER: Please note that this is not and should not be considered a replacement for tax,
legal or investment advice. Always consult your tax advisor, CPA and/or general counsel
before filing.
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