Form 5500-EZ Requirements: 5 Easy Steps

Form 5500 falls under the Code of the Internal Revenue and Employee Retirement Income Security Act, also known as ERISA. Moreover, this form provides information regarding pension, health, and employee benefit plans.

If you have a plan that falls under the purview of ERISA, you are responsible for filing Form 5500. Hence, you must understand the filing requirements for the form and its process.

Three agencies in the U.S. government are responsible for Form 5500:

  • PBGC (Pension Benefits Guarantee Corporation)
  • IRS (Internal Revenue Service)
  • DOL (Department of Labor)

There are numerous questions that many people have concerning the filing requirements of Form 5500. Here, we will provide you with the answers:

Filing form 5500 Tips

Yes, filing form 5500 can seem extremely difficult to many people, and rightly so. There are a lot of important information and details involved that, if entered incorrectly, can waste a lot of your time. Therefore it is quintessential that everyone knows how to file form 5500. Once you follow the guidelines mentioned below, you will realize that it is not as difficult as you think.

Mostly everyone is familiar with the fact that people are penalized for non-compliance if they do not fill out and file the form correctly. The truth is that the filing requirements are actually pretty complex, and people can quickly get confused and make mistakes. We will discuss multiple queries in brief detail to ensure that you can file form 5500 with the most excellent ease and without any errors.

Essential Things to Consider When Reviewing or Filling Form 5500

  1. Make sure that you provide complete contact information for the sponsor and administrator on the lines of correspondence.
  2. Moreover, describe the funding arrangements, benefits, and plan participation on the corresponding lines.
  3. Provide the plan’s name, plan number, and information for the annual report identification. Furthermore, do not forget to provide the effective date above the signature of the employer and plan administrator.
  4. Most importantly, check all the boxes underline ten to ensure you attach the form according to the printed instructions.

What Am I Supposed To File

The instructions present in the form 5500 determine the schedule and form that are required to be filed. Many attributes come into play regarding what you have to file. The size and type of plan should be taken into consideration.

Three duties form 5500 performs. First of all, it is used for pension plans after filing to the IRS. Secondly, it is filed to the DOL for pension plans. Finally, it is filed to ERISA for receiving welfare and benefit plans. Depending on your plan, it is possible that it could be subject to all of the three filing requirements.

It is not uncommon for employers to get confused with the filing requirements. The amount of forms an employer has to file solely depends on how many employees’ plans are provided. This might sound simple to you, but it isn’t. It entirely depends on how the employee’s plan documents are written. An employee having vision, dental and medical benefits might have one, two, and three plans.

Critical Rules

For many self-employed individuals, Form 5500-EZ is one of those “to do” tasks that should be completed each year. It is an information-only filing that reports annual holdings of Solo 401(k) plans to the Internal Revenue Service. It can be filed electronically using the EFAST2 filing system. However, the IRS still maintains paper forms, and most plans are still filed on paper.

For one-participant plans, the most important part of Form 5500-EZ is the financial section. Here, you will be asked to enter the total amount of money that the plan has at the start of each year, as well as rollovers and liabilities. You will also be required to check a box if any of your participants have outstanding loans.

If you have a Solo 401(k) plan with more than $250k in assets, you will need to file a different version of Form 5500. Whether you choose to file the old or the new version, you will need to make sure that you complete the form correctly. The form is simple to fill out, and most Solo 401k owners can do so in less than an hour.

When you do not submit your Form 5500-EZ on time, you may face penalties. The IRS has a penalty relief program for delinquent filings. These penalties range from $250 a day to $150,000.

To qualify for this relief, you must file a late Form 5500-EZ return before the normal due date. You must also file Form 5558 with the IRS to request an extension. This extension is valid until the fifteenth day of the third month after the original due date.

When Are The Filings Due?

Every employer should make sure that they file form 5500 before every plan year. The only exemption is that the plain is exempt from the filing requirements. The last day of the seventh month that follows the conclusion of the plan year is when the files are due. So, if your plan year ends on January 31, the files will be due on July 31.

However, you can obtain an extension, but make sure that you do not do it at the last moment. It would be advisable to decide on getting an extension at least a few weeks prior. People seeking an extension receive two or two and a half months.

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