Ein

[Krazy]

I have a client that has an S-corp. He wants to set up a solo 401(k). Does he need a separate EIN for the 401?

[jeffmcpa2010]

Is he administering his own 401K? Everyone I have seen has always been through a financial/broker or similar, that takes care of all that.

[Krazy]

He is using a broker, but the broker is unsure if he needs a separate EIN. So, it's in my lap. I'm getting mixed info from the IRS site as well as searching on the internet.

[jeffmcpa2010]

Google found me the answer below: based on which I say yes it needs a number, but if the account is already opened and funded it must already have a number, or else the Broker might have used the wrong number on the account.

[qbteachmt]

"but the broker is unsure if he needs a separate EIN"

He needs a new broker. Sheesh.

[Krazy]

So in one place, the IRS states to get an EIN for a solo 401(k), but then when you start actually applying, the EIN assistant site says you may be able to use the business EIN. 

[jeffmcpa2010]

Agreed. 

[jeffmcpa2010]

They ALREADY MUST HAVE A #

You cannot open a bank account or brokerage account with out a tax id#.

I recommend you be very cautious with this. Personally it seems like you are getting close to be doing administration functions for the 401k and those can be very technical and costly if all the rules are not followed correctly.

Were it I, either the client would be moving the account to a professional retirement account administrator, or moving his accounting / tax work to someone else.

I don't need the headache of some half/ass broker setting something up and the responsibility getting dumped on me. 

I wish you luck with this one.

[qbteachmt]

"A one-participant 401(k) plan is generally required to file an annual report on Form 5500-EZ if it has $250,000 or more in assets at the end of the year. A one-participant plan with fewer assets may be exempt from the annual filing requirement."

From the IRS: https://www.irs.gov/retirement-plans/one-participant-401k-plans

I wonder who will be doing the compliance monitoring, the reporting, etc? This broker seems like they don't know this process.

[qbteachmt]

I found an article with Pictures for you to follow:

https://www.mysolo401k.net/solo-401k/ein-number/

[Krazy]

Thank you. I've been on that site as well. That's how I started down the application process. I think that I will throw this back to the broker. 

[rbynaker]

I don't think an EIN is absolutely necessary unless/until you have to start filing 5500 forms.

I started my Solo fairly late so I still have <$250K of assets and am still just using my business EIN.  If/when I get over the $250 I will apply for an EIN and notify the broker accordingly.

I'm at the point of burn-out on this stuff that I just have to trust that my younger self knew what he was doing at the time. 🙂  I have a calendar reminder every year in January to check the account balance for 5500 filing.

Rick