If you run a Solo 401(k), the IRS may want a form from you by July 31 — and most owners have never heard of it. Once your plan tops $250,000 in assets at year-end, you have to file Form 5500-EZ. Below that line nothing’s due, with one exception: you always file in the year you close the plan, whatever the balance.
Miss the deadline and the math turns ugly fast. The penalty runs $250 a day, capped at $150,000 per return — the SECURE Act raised it from $25 a day a few years back. For a form most owners didn’t know existed, that’s a brutal price.
Here’s who gets caught. The successful owner whose Solo 401(k) quietly crossed $250,000 mid-career and never knew a form kicked in. Or the one who closed a plan after a strong year, rolled the balance to an IRA, and assumed that was the end of it. Neither did anything wrong — they just never heard the threshold existed.
Here’s the better news. If you’ve missed filings and the IRS hasn’t sent a notice yet, you can still clean it up cheap — $500 per delinquent year, capped at $1,500 total. The catch: that window closes the moment a CP 283 notice lands, and only a correct paper filing with Form 14704 qualifies.
We’d rather check now than fix a six-figure problem later. If you’re not sure whether your plan crossed the line — or whether last year’s filing actually got done — give us a call.
For informational and educational purposes only. Not investment, tax, or legal advice. Lake Hills Wealth Management is a Registered Investment Advisor registered with the Securities and Exchange Commission. Registration as an investment adviser does not imply a certain level of skill or training. Our current Form ADV, Part 2A is available at adviserinfo.sec.gov.