Final 5500 EZ for solo/ individual 401k

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Topic Author
calmweatherahead9
Posts: 6
Joined: Mon Apr 01, 2024 11:58 am

Final 5500 EZ for solo/ individual 401k

Post by calmweatherahead9 »

I dissolved a single-member LLC and in process of closing up the the solo/ individual 401k. All funds have been rolled out of the plan to a rollover ira. I need to complete a final 5500EZ. I still had questions after reading the posts about the 5500EZ. I do not expect any additional dividends to the account. Any comments on the following questions are helpful:

-Has anyone had any help filling out the form by calling the IRS directly?
-Does the partial plan year end on the date the all accounts in the plan are $0? Or is it the final balance before the account goes $0 (i.e., the dollar value of the rolled over/out of plan)?
-5a1 total number of participants at the beginning of the plan year. Is this 1?
-5a2 total number of active participants at the beginning of the plan year. Is this 1?
-5b1 total number of participants at the end of the plan year. Is this 0?
-5b2 total number of active participants at the end of the plan year. Is this 0?
-Part III Question 6a total plan assets at end of year balance. Is this $0? or the dollar amount that was rolled over/out of the plan?

I have read some different responses to some of the questions above.
toddthebod
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Joined: Wed May 18, 2022 12:42 pm

Re: Final 5500 EZ for solo/ individual 401k

Post by toddthebod »

calmweatherahead9 wrote: Mon Apr 01, 2024 1:48 pm I dissolved a single-member LLC and in process of closing up the the solo/ individual 401k. All funds have been rolled out of the plan to a rollover ira. I need to complete a final 5500EZ. I still had questions after reading the posts about the 5500EZ. I do not expect any additional dividends to the account. Any comments on the following questions are helpful:

-Has anyone had any help filling out the form by calling the IRS directly?
-Does the partial plan year end on the date the all accounts in the plan are $0? Or is it the final balance before the account goes $0 (i.e., the dollar value of the rolled over/out of plan)?
-5a1 total number of participants at the beginning of the plan year. Is this 1?
-5a2 total number of active participants at the beginning of the plan year. Is this 1?
-5b1 total number of participants at the end of the plan year. Is this 0?
-5b2 total number of active participants at the end of the plan year. Is this 0?
-Part III Question 6a total plan assets at end of year balance. Is this $0? or the dollar amount that was rolled over/out of the plan?

I have read some different responses to some of the questions above.
Any different responses were wrong, because you have it right. The end of year participants and balance needs to be zero, because the plan can't close if it still has assets or participants.

The end date of the plan is when everything is zero.

For beginning of year participants, it's one for just you, two if your spouse was also a participant.
HomeStretch
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Joined: Thu Dec 27, 2018 2:06 pm

Re: Final 5500 EZ for solo/ individual 401k

Post by HomeStretch »

^^^ This

Don’t forget to check the Form boxes for “short plan year”, “final return” and, if the first Form 5500-EZ for this plan, “first return”.

Consider filing via the EFAST2 system rather than filing on paper. The filing system will do some data validation checks and you receive confirmation of filing.
Topic Author
calmweatherahead9
Posts: 6
Joined: Mon Apr 01, 2024 11:58 am

Re: Final 5500 EZ for solo/ individual 401k

Post by calmweatherahead9 »

Thank you, Todthebod and Homestretch, for the replies. I had a few more questions.

-I asked the brokerage if the i401k was a brokerage account. The small business rep said no. I had several mutual funds to select from but it was not a traditional brokerage account where i could buy any stock or mutual fund that I wanted. I read in some articles and postings that some selected 2r "participant-directed brokerage accounts provided as an investment option". In this case, I would not select 2r correct?

-Section 3a Plan administrator's name asks for an EIN. I am the plan administrator but the employer in Section 2a is the LLC. Do I put the LLC EIN for the plan administrator? Do I need to apply for another EIN as the plan administrator? Can I put my social security number?

-Does the IRS ever confirm that the 5500EZ is accepted and no issue. Or is it you submit the form and if you don't hear from the IRS, all is good?

Also, the 5500EZ form is for 2023. The last plan year is 2024. Do I need to wait for 2024's form to come out?

Thank you!
HomeStretch
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Re: Final 5500 EZ for solo/ individual 401k

Post by HomeStretch »

The instructions to Form 5500-EZ may be helpful:
https://www.irs.gov/pub/irs-pdf/i5500ez.pdf
Box 3a p.5 - write “same” if the plan administrator is the plan sponsor

The IRS does not confirm acceptance of paper Form 5500-EZ. See my post above about EFAST2’s filing acceptance.

Use the 2023 Form but fill in the 2024 plan year beginning and ending dates. A 2024 Form will not be available on EFAST2 until 1/1/2025.
Topic Author
calmweatherahead9
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Joined: Mon Apr 01, 2024 11:58 am

Re: Final 5500 EZ for solo/ individual 401k

Post by calmweatherahead9 »

Thanks HomeStretch. I am still uncertain how to approach given the instructions. In this case, the Employer name for 2a is the LLC. The plan sponsor of an i401k is the individual. It seems that I would put my name in 3a "Plan administrator's name" and then the question would be what EIN for 3b. Would that be the LLC's EIN?
toddthebod
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Re: Final 5500 EZ for solo/ individual 401k

Post by toddthebod »

calmweatherahead9 wrote: Tue Apr 02, 2024 9:17 pm Thanks HomeStretch. I am still uncertain how to approach given the instructions. In this case, the Employer name for 2a is the LLC. The plan sponsor of an i401k is the individual. It seems that I would put my name in 3a "Plan administrator's name" and then the question would be what EIN for 3b. Would that be the LLC's EIN?
Just write "same" and don't worry about it.
HomeStretch
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Re: Final 5500 EZ for solo/ individual 401k

Post by HomeStretch »

calmweatherahead9 wrote: Tue Apr 02, 2024 9:17 pm Thanks HomeStretch. I am still uncertain how to approach given the instructions. In this case, the Employer name for 2a is the LLC. The plan sponsor of an i401k is the individual. It seems that I would put my name in 3a "Plan administrator's name" and then the question would be what EIN for 3b. Would that be the LLC's EIN?
Write “same” for 3a.

The plan sponsor of an individual 401k is a business (sole proprietorship, LLC, etc.) and not an individual. In a self-employed business, you happen to wear all the hats - employer, plan participant, plan administrator, owner of the business.
Topic Author
calmweatherahead9
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Joined: Mon Apr 01, 2024 11:58 am

Re: Final 5500 EZ for solo/ individual 401k

Post by calmweatherahead9 »

Thank you toddthebod and homestretch!

I was reading another post called "Re: 5500EZ closing solo 401K - sruck section 3" where the writer, who was closing out the i401k and filling out 5500EZ said his/her assets at the beginning of the year were $200k and was going to put for beg of year assets 6a $200k, 6b $0 and 6c $0. Shouldn't 6c equal 6a-6b so $200k - $0 = $200K and not $0? For the end of the year, 6a, 6b and 6c should all be zero?
toddthebod
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Re: Final 5500 EZ for solo/ individual 401k

Post by toddthebod »

calmweatherahead9 wrote: Wed Apr 03, 2024 10:54 am Thank you toddthebod and homestretch!

I was reading another post called "Re: 5500EZ closing solo 401K - sruck section 3" where the writer, who was closing out the i401k and filling out 5500EZ said his/her assets at the beginning of the year were $200k and was going to put for beg of year assets 6a $200k, 6b $0 and 6c $0. Shouldn't 6c equal 6a-6b so $200k - $0 = $200K and not $0? For the end of the year, 6a, 6b and 6c should all be zero?
His form was displaying incorrectly in whatever browser he was using. He did not understand which boxes went under which columns.
Topic Author
calmweatherahead9
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Joined: Mon Apr 01, 2024 11:58 am

Re: Final 5500 EZ for solo/ individual 401k

Post by calmweatherahead9 »

Ok. So the answer in that scenario would $200k in box 6c for beginning of the year? I was doing a double-take on the answer there. Thinking I thought I was all set, and I read that thread. Thanks!
toddthebod
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Joined: Wed May 18, 2022 12:42 pm

Re: Final 5500 EZ for solo/ individual 401k

Post by toddthebod »

calmweatherahead9 wrote: Wed Apr 03, 2024 11:06 am Ok. So the answer in that scenario would $200k in box 6c for beginning of the year? I was doing a double-take on the answer there. Thinking I thought I was all set, and I read that thread. Thanks!
Correct
Topic Author
calmweatherahead9
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Joined: Mon Apr 01, 2024 11:58 am

Re: Final 5500 EZ for solo/ individual 401k

Post by calmweatherahead9 »

When filing on efast, there is "add signers" and then "sign" tab. if it's just for a solo, where the owner is the plan administrator, employee, employer etc., do i just go to the "sign" tab or do I need to add myself to the "add signers" tab where it asks for an email?

Thanks!
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Harry Livermore
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Re: Final 5500 EZ for solo/ individual 401k

Post by Harry Livermore »

calmweatherahead9 wrote: Tue Apr 02, 2024 8:50 pm
-Does the IRS ever confirm that the 5500EZ is accepted and no issue. Or is it you submit the form and if you don't hear from the IRS, all is good?
I closed my small-company plan at the end of 2022, and the third-party administrator did a "short year" filing for 2023.
Once everything had been submitted I requested confirmation of all years' filings. The admin sent me a link to a page at efast.dol.gov where I could see all filings. I saved everything I could, and screen-shotted what I could not "save" as a PDF. You may want to do the same.
Cheers
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