How do I terminate my Solo 401k plan?

ANSWER:

Terminating your Solo 401k plan includes the following steps:

• Distribute all assets of your Solo 401k plan

Distributions may be taxable or non-taxable, depending on the type of distribution taken. 

• Formally request to terminate your Solo 401k plan

You must submit a request to us in writing for the termination of your Solo 401k plan.

• We will issue a Plan Termination package to you

The plan termination package includes two documents which will be emailed to you- the Action by Board of Directors document and the Plan Termination package.

• Sign the documents and keep them for your records

Since you are Plan Administrator, you are responsible for keeping all records related to the Solo 401k plan.  This includes the termination documents.

• Prepare the filing for the year in which the Solo 401k plan was terminated

If you are terminating your Solo 401k Plan this year, you will have to complete the following forms next year.  Obtaining, completing, and submitting these forms are your responsibility.

1. A 1099-R is required for both taxable distributions and non-taxable rollovers.  This form must be distributed to the recipient of the distribution in January of the year following the distribution or rollover.
2. A final 5500-EZ is required for all terminated 401k plans