Do I Have to File a Tax Return for Solo 401k?

Generally, you will not need to file a tax return for your Solo 401k Plan because it's tax exempt under IRC 401 and  IRC 501. However, only under three circumstances will you need to file tax return for Solo 401k, which are:

Solo 401k Balance Exceeds $250,000

When your Solo 401k balance exceeds $250,000,  you will need file informational tax return titled Form 5500 EZ Annual Return of One-Participant (Owners and Their Spouses) Retirement Plan with the IRS by July 31. A two page return, your Solo 401k Provider should be able to file Form 5500 EZ on you behalf. If not, your accountant can take care of it for you. Again, if your Solo 401k balance is $250,000 or less, you do not need file Form 5500 EZ. Visit Solo 401k Form 5500 EZ to learn more.

Close Solo 401k

You are required to file a final Form 5500Z Annual Return of One-Participant (Owners and Their Spouses) Retirement Plan with the IRS when you close your Solo 401k. This is required regardless of account balance. So don't confuse this requirement with the over $250,000 balance which applies to Solo 401k while it remains in operation.

Take Distribution from Solo 401k

The last circumstance that will subject your Solo 401k to tax reporting is when you make a distribution from Solo 401k, or process a direct rollover or transfer to an IRA or another 401k, respectively. All three of these transactions require reporting on Form 1099-RDistributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.

Lastly,  before you Open Solo 401k for investing in alternative investments such as real estate, precious metals, trust deeds, tax liens, etc., it is recommended that the Solo 401k Provider that you sign-up with offers full service including filing Form 5500 EZ and Form 1099R when applicable.