Solo 401k Deadlines: The Critical Dates You Need to Know

There are different stages and processes involved when it comes to managing a Solo 410k account. Along with these, there are certain types of deadlines you need to be aware of. If you somehow fail to meet with these limits, there can be some serious consequences.  The deadlines differ on the application and depend on the stage you are at with your Solo 401k process.

Here are the deadlines you should know:

Solo 410k Establishment Deadline

There are certain IRS Solo 401k rules regarding the processing of contributions. If you want to perform payments, you will need to open your solo 401k account by December 31st at the latest. A solo 401k checkbook account can be established later.  However, the adoption agreement and required paperwork are necessary by the end of the calendar year.

Looking to Get $100,000+ Into Retirement?

We'll show you the #1 tax and retirement strategy!

For example, a sole owner, Phil who is self-employed wants to open a Solo 401k account. He wants to make tax deductible solo contributions for 2018 by mid-April, 2019.  To do this, Mark is required to sign the necessary documents by December 31, 2018. He will have to wait till April 15, 2015, to open his Solo 401k account.

Solo 401k Contribution Deadline

It is important to note that only your business tax return is an acceptable Contribution method for your Solo 401k. This usually occurs because of date plus extensions.

The deadlines mostly depend upon the type of entity that sponsors the independent Solo 410k account. Here are a few for you to understand:

  • In the case of an LLC taxed as a partnership, the deadline is March 15. The date is extendable to September 15 if appropriately filed.
  • In the case of C-Corporation, the deadline is April 15 which is extendable to October 15.
  • If the entity is an LLC taxed as a Sole Proprietorship, the final date is the same as in case of C-Corporation.
  • If the entity is an S-Corporation, the deadline is the same as in case of the entity type of LLC taxed as a partnership.
  • If the entity type is a Sole Proprietorship, the deadline is also April 15 and extendable to October 15 if you file a tax return.
  • In case of an LLC taxed as an S-Corporation, the deadline is also March 15 which is extendable to September 15.
  • In case of a Partnership entity type, the deadline is March 15 which is also extendable to September 15.

Here’s an example to help you understand the deadline procedure:

Mr. John is in the S-Corporation entity type which as a deadline of March 15. However, he can file a tax return application which will extend the deadline to September 15. This indicates that he will have more time to pay his contributions.

Some Important Limitations to Consider:

  • In case of S-Corporation and C-Corporation entity types, the initial figure to calculate the Solo 401k contributions is the W-2 Income method.
  • In case of a Sole owner entity type, the initial figure to calculate Solo 410k contributions is the line 31 of Schedule C.
  • In case of a Partnership, the initial figure to calculate the Solo 401k contributions is Schedule K of Form 1055 line 14.

Form 1099-R Deadline

If at any beneficiary or plan contributor takes a certain amount of distribution from his/her account, some IRS reporting rules may apply.  The application of the 1099-R form requirements also includes Roth 401k conversions.  The contributor has to follow a procedure to perform distributions. These include sending Form 1099-R, Pension Distributions, allowances, Insurance details, etc. these have to be sent to the IRS and to the person who will receive the distributions. The deadline is the 28th of February.

Form 5500-EZ Deadline

A Solo 401k business owner in compliance with a solo 401k provider will have to perform specific necessary tasks. These include filing a yearly report by the last day of the 7th month in the plan year. The form 5500-EZ is for reporting the total worth of the plan.

However, you are not required to file the form until your plan assets exceed $250,000. In case of the final plan year, all participants will have to fill the form 5500-EZ. That will serve as a proof that all the distributions are complete. Click here to find out more about form 5500-EZ.

Solo 401k Loan Payment Deadlines

You can settle Solo 401k loan payments during different periods. This usually revolves around the time of the issuing of the loan. When you miss a payment, a grace period is available for you to make up for it.  The late payment is due by the last day of the quarter of 3 months following the quarter in which the payment was originally due.

It is necessary to know your deadlines to ensure that you are up-to-date with the IRS rules and regulations.

Paul Sundin

Get a FREE 30 Minute Consultation

Reach out to us today and we'll show you our favorite strategies! We can show you how to structure a plan for maximum tax benefit and provide you with a custom plan design.

Leave a Comment