Our Solo 401k has 100% IRS approval and each 401k plan comes with an IRS Opinion Letter proving the Qualified Status of your retirement plan. Our team works with the IRS and Dept of Labor on an ongoing basis to ensure our documents are up to date, and the most compliant while simultaneously providing the greatest flexibility in the industry for self-directed investors.
Because the Solo 401k is an IRS-approved retirement plan, there is no tax return. The assets in a Solo 401k can grow tax-deferred (when using traditional 401k funds) or tax-free (with Roth 401k funds). This is a great advantage to the self-directed investor because any profits on investments inside the Solo 401k plan are not subject to capital gains taxes.
Once the Solo 401k has $250,000 or greater in plan assets, IRS form 5500-EZ should be filed for the plan. This form is simply an informational return that is filed with the IRS. 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.
Solo 401k plans with assets totaling less than $250,000 have no filing requirement at all.