EIN for the business vs. EIN for the 401k
Does the Solo 401k get its own EIN, separate from the EIN of my business? If I’m a sole proprietor, do I need to get an EIN for my sole proprietorship? I’ve been using my name and my Social Security Number for everything related to my sole proprietorship, like filing taxes. Your Solo 401k plan […]
Corporations and compensation
Corporations or LLCs with corporation elections are required to pay a reasonable compensation. The Internal Revenue Code establishes that any officer of a corporation, including S corporations, is an employee of the corporation for federal employment tax purposes. S corporations should not attempt to avoid paying employment taxes by having their officers treat their compensation […]
Updating the 401k EIN address
If your adopting business address changes, this should be updated: Email your address change to clients@sensefinancial.com. We will update your address in our system. To update the address with the IRS for the 401k EIN, complete one of the methods in their instructions: IRS instructions for address change
Defining compensation
Your Solo 401k contributions are based on your compensation from the adopting business of your Solo 401k. Your compensation determines the amount you can contribute. Since your Solo 401k contributions are based on your compensation, it’s important to define compensation correctly. So what is compensation? Compensation is active, not passive, income Active income is earned from […]
Your role as Solo 401k plan administrator
As plan administrator, you are responsible for administering the plan according to the plan documents and in compliance with the IRS. Your responsibilities as plan administrator include: Keeping records of all plan activities Recordkeeping is one of the main responsibilities of the plan administrator. You will need records of all contributions, distributions, investments, etc. The […]
Mandatory Roth catch-up contributions
Starting in 2026, all catch-up contributions made to the Solo 401k by a higher-paid employee must be made as a Roth. This is per the IRS’s recently released final regulations for the SECURE Act 2.0, Section 603. What are catch-up contributions? In 2025, the catch-up contribution limit was $7,500 In 2025, the super catch-up contribution […]
Super catch-up contributions
The SECURE Act 2.0 introduced a new limit to catch-up contributions to your Solo 401k, if you are age 60-63. These are referred to as “super catch-up contributions.” In 2025, the catch-up contribution limit was $7,500 In 2025, the super catch-up contribution limit was $11,250. In 2026, the super catch-up contribution limits remains at $11,250. […]
Employer Roth contributions
Employer/profit sharing contributions can now be made as Roth, under the provisions of the SECURE Act 2.0. Previously, employer/profit sharing contributions could only be made as pre-tax. If you wanted the funds as Roth, you would need to make the pre-tax employer contribution to the Solo 401k and then convert the funds to Roth within […]
Possible extensions for 5500-EZ filing
You may be able to obtain a possible extension for filing Form 5500-EZ, but extensions must be obtained before the filing due date. If an extension is obtained, you would mark the appropriate box on Form 5500-EZ, Part I, B. The due date of Form 5500-EZ filing is: Possible extensions to file Form 5500-EZ include: […]
Liability protection for the 401k
What protection is available for a Solo 401k and its assets? A Solo 401k and its assets can be protected through: Federal protection in the case of bankruptcy The Bankruptcy Code, Section 522, gives federal protection in the case of bankruptcy. This means that if a 401k participant declares bankruptcy, their 401k assets will be […]