solo 401k | Ed Slott and Company, LLC

solo 401k

The IRS May Be Coming After Your Solo 401(k) Plan

If you sponsor a solo 401(k) plan, beware! The IRS recently announced that it is targeting several employer plan areas for stepped-up auditing. One of those areas is solo 401(k) plans. The fact that solo plans made the list is a signal that the IRS believes there are widespread compliance issues with these plans. While solo 401(k) plans don’t have as many rules to follow as employer-based 401(k) plans, there are still several requirements. The IRS announcement should be a warning to business owners with solo plans to make sure they are obeying those rules.

Can I Still Open Up A New Solo 401(k) for 2020?

We’ve been getting a number of questions lately about whether it’s too late to set up a new solo 401(k) plan for 2020. The answer is “sort of.” Business owners with no employees (other than a spouse) can contribute to a solo 401(k) plan. Solo plans are typically used by sole proprietors but are also available if your business is incorporated or structured as a partnership or LLC.

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