Business closed - Solo 401(k) compliance questions

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Hope123
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Joined: Tue Feb 10, 2015 6:43 pm

Business closed - Solo 401(k) compliance questions

Post by Hope123 »

Business had no activity in 2021. Filed final tax return and notified state and IRS of business closing in 2022. Distributed Solo 401(k) assets and terminated the plan in December 2023. Was the plan out of compliance in 2022 and 2023? I am seeing conflicting info. Spoke with someone with a third party administrator company (at first he said there was no need to file form 5500 since the amount was less than $250k but looked it up while talking to me, that’s why I need reassurance but can’t seem to find anyone else who can clarify and my CPA doesn’t handle this) and he said that it didn’t matter and it’s nothing to be concerned about. He said to file form 5500ez online by 7/31 and that would be the last step. Thanks!
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BolderBoy
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Re: Business closed - Solo 401(k) compliance questions

Post by BolderBoy »

Hope123 wrote: Mon Jul 08, 2024 2:24 pm He said to file form 5500ez online by 7/31 and that would be the last step. Thanks!
Yes, that is it. Why wait. Do it now.
"Never underestimate one's capacity to overestimate one's abilities" - The Dunning-Kruger Effect
Topic Author
Hope123
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Joined: Tue Feb 10, 2015 6:43 pm

Re: Business closed - Solo 401(k) compliance questions

Post by Hope123 »

Thank you. So that fact that the plan wasn’t closed for 2 years after the business was closed is not an issue?
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BolderBoy
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Location: Colorado

Re: Business closed - Solo 401(k) compliance questions

Post by BolderBoy »

Hope123 wrote: Tue Jul 09, 2024 1:03 pmThank you. So that fact that the plan wasn’t closed for 2 years after the business was closed is not an issue?
Apparently not. Vanguard still shows my i401k plan as active even though I filed my final 5500EZ many years ago. I've called Vanguard about this several times over the last bunch of years and each time they tell me that the i401k accounts will fall off eventually. Getting close to 10 years since I closed the business.

What matters to the IRS is that you file your final 5500EZ. I filed mine timely.
"Never underestimate one's capacity to overestimate one's abilities" - The Dunning-Kruger Effect
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