Main Street Business

#596 How to Set Up, Maintain, and Maximize Your Solo 401(k)

• Mark J Kohler and Mat Sorensen

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Take control of your retirement with our Solo 401(k) Special, starting at $895. The offer ends on October 17, 2025! Learn more: https://kkoslawyers.com/solo-401k-special-2025/?utm_source=buzzsprout&utm_medium=description-link&utm_content=596-solo-401k-p2-maintain&utm_campaign=main-street-business-podcast

Are you taking full advantage of one of the best retirement strategies available to entrepreneurs and small business owners? In this episode of the Main Street Business Podcast, Mark J. Kohler and Mat Sorensen dive deep into how to set up, maintain, and maximize your Solo 401(k) — giving you the tools to make the most of this powerful retirement plan.

The Solo 401(k) offers higher contribution limits, flexible investment options, and unique tax advantages that make it one of the most attractive plans for the self-employed. Mark and Mat break down everything you need to know about eligibility, plan setup, ongoing compliance, and strategies to ensure your plan is working for you. They’ll also cover common mistakes, key rules to remember, and proven ways to grow your wealth through real estate, small business investments, and alternative assets inside your Solo 401(k).

Whether you’re new to retirement planning or already have a Solo 401(k) in place, this episode provides practical steps to help you stay compliant, maximize contributions, and take full advantage of the tax-saving opportunities available. By the end, you’ll understand why the Solo 401(k) is often a smarter choice than a SEP IRA or other retirement plans — and how to ensure yours is structured correctly.

If you’re serious about saving taxes, building wealth, and taking control of your financial future, this is an episode you don’t want to miss!

You’ll learn:

  • How to determine if you qualify for a Solo 401(k) — even if you have part-time employees or a small side business
  • The key rules for full-time and part-time employees, and how to stay compliant as your business grows
  • Smart strategies for setting optimal salary levels for yourself and your spouse to maximize contributions and minimize taxes
  • The different contribution options (traditional, Roth, and employer match) and how to combine them for greater flexibility
  • How to roll over or restate an existing 401(k) into a self-directed plan that lets you invest in what you know best

Get a comprehensive tax consultation with one of our Main Street tax lawyers that can build a tax strategy plan with an affordable consultation that will leave you speechless!! 

Here’s the link - https://kkoslawyers.com/services/comprehensive-bus-tax-consult/?utm_source=buzzsprout&utm_medium=description-link&utm_content=596-solo-401k-p2-maintain

SPEAKER_01:

When we're talking about a solo K, you can go buy stocks, bonds, and mutual funds. Okay, I'm not against that, but that's not all that you can invest in. Like when you have a self-directed solo 401k, you can buy real estate, you can invest in a private company, you can buy crypto, you can buy precious metals, you can invest in a private fund. We're not saying you have to go to Wall Street and buy more stocks, bonds, annuities, or mutual funds.

SPEAKER_00:

It's all about the rate of return, investing in what you know, and investing in something else that could get you two or three times the return you would get over here in just a simple mutual fund. Not that they're bad, but wouldn't you like to do both? And you can win. Yeah, some may say fast and the furious part two was one of their better ones. Uh, I think this could be better than part one, not sure. You know, yeah, maybe back to the future too.

SPEAKER_01:

I mean, I don't know. I don't Fast and Furious. Is that your lane? I no, I'm I'm I don't know. Have you seen it?

SPEAKER_00:

Parts well, we better get into this before. I'm gonna, you know, I just you know, I don't know how many versions of Fast and the Furious are. That's the big joke. So maybe that's from a well, everybody, please, if you haven't listened to part one, I would recommend you go back and catch that before we proceed. The reason why is a lot of the questions you may have answered of why they're so great, and I think we hit our top 10 or whatever it was of just awesome reasons for a solo 401k and how they function is in part one. Now, Matt, what's our lineup today? Well, here's what we're gonna do.

SPEAKER_01:

Yeah, here's the agenda, uh, so to speak. We're talking about how do you qualify for the solo 401k? It's not for everyone, but for who it's for. It's the freaking best retirement account to set up. Um so we're gonna go over that. How do you set this up? What are the documents involved? What's legally required to get this set up and operating? Um, how do I get the money in and contribute, roll over money, get new money in? Uh, that's really the maximizing part here. And then we'll talk about investing it and then maintaining it. There are some requirements and things you got to do to keep it um up to date for IRS standards. So um that's our agenda. We're gonna rip through it, give you everything you need to know on this. And please know we've got a team of lawyers at KQO Slawyers that sets these up every day, advises clients, our team at directed IRA can help handle the accounts. So we've got the solutions for you when you want to go execute on this. Um but let me hit you want to hit go ahead, Mark.

SPEAKER_00:

Well, I want to just say one thing here, too, is that there when you meet with uh one of our tax lawyers, or if you have a good advisory, we hope, if you don't, uh but when you do, our goal is to help you find the right plan. And that's really part of this first topic of do you qualify? Because you may think, oh, I qualify or I don't. Well, you never know. That's the goal of the attorney to go, okay, maybe we go through a SEP for a year, then we kick it out and do this or do that. Maybe we do need to do a safe harbor 401k, or well, let's do a mega backdoor Roth IRA. So there's a lot of nuances that are gonna depend on your facts and circumstances. But I think that so that's why a consult helps. And every 401k we set up at our office, uh, very affordable, uh, you're gonna meet with that lawyer tailoring it, tailoring it to you on Zoom, anywhere in the country. So I guess you're right, Matt. Qualifying first, right?

SPEAKER_01:

Yeah, let's hit that. So to qualify for this, you must be self-employed with no other employees other than you, spouse, kids, or business partners in the company. And the solo cake concept, just to make sure you understand this, this was created specifically for people that don't have a lot of employees in a company. It's just you, you're the real estate agent, the broker, the consultant, whatever it is. You don't have a whole team, right? This is just you, or maybe it's partners or family that can still work. But all the 401k rules and matching and employee issues, and that is you don't have to worry about any of that with the solo K. And that's why. So we want to make sure you qualify for this so you can get this kind of like expedited, more simple 401k that you can put 70 grand a year into.

SPEAKER_00:

Yeah, and that's what makes it more affordable to set up too, is because there's not census or a census of all the employees and their ages and their wages and all that. Now, here's what's interesting on this point. Maybe you do have an employee right now. You might qualify still because you're disqualified once you have an employee that hits a one, a full-time employee that hits a one-year anniversary. Yeah. So, and we'll come to part-time employees here in a moment.

SPEAKER_01:

Yeah, it's all part-time in a second.

SPEAKER_00:

So we're in the middle of 2025 essentially, or the third quarter of 2025 right now. So if you hired a full-time employee six months ago, okay, great, you can still do a solo 401k this year. And then in fact, uh you turn the corner, and then when they hit their anniversary date, that's when your solo 401k would have to end. Now, Matt, in fact, I'm gonna ask you that is it it's the year they hit, it's not the date. So if they you have a full-time employee that in the middle of 2026, that's their anniversary date, yeah, then you can't make a contribution to a solo for the whole year, or you could up until their anniversary date.

SPEAKER_01:

You you could up until their anniversary date, because they don't qualify to participate in the 401k until they've worked for you for a year. When we set up the solo K, you can put that as a requirement that, you know, this only works if you've worked here for a year. Now, by the way, if you're a brand new business owner setting up a solo K, don't do that because you'll self-select yourself out. But um, but let's say you've been in business for a while anyways, and you create a new 401k, say, hey, this is only available to people that have worked here a year, that the IRS lets you do that. That way, if you do have employees that kind of come and go, or even that one stays for over a year, um, you at least have that window of one year. But in your example, you set up a solo K right now and you have an employee that started a few months ago, you're good for 2025 contributions. And once 2026 hits, you can make your 2026 contributions. But let's say that employee has then been a year with you in June of 2026, that's when you cannot contribute anymore, which was fine if you already got your 2026 contributions in. So now you must have earned that income through 2026 so far, right? Um, so that's how the solo K work if you did have a full-time employee. And we do have that. We have clients that have solo 401ks and they basically keep them and keep investing them. Maybe they roll it to an IRA or a Roth IRA if it's a Roth solo K. Once they have that employee, you could even transition to a group 401k, much more complex and much more costly. Um, but you have another options there. It's not like the 401k is done or you can't use it. It's just like you're not putting new dollars in the solo K structure anymore.

SPEAKER_00:

Yeah, it's really a way to unlock the solo 401k for one or two years, depending on when that anniversary date for your first or your other full-time employee. Now, the rule with part-time employees is if you have uh any part-time employees that have hit their three-year anniversary, that's when you they you'd have to include them in the plan or close down your plan. So uh in 30 and the and full-time is versus part-time, it's a little different test. What is it about?

SPEAKER_01:

It's like 30 hours. It's like it's almost like in the 20s. It's it's like you're like, since when is that full time? So what I will say is it hits faster than you think. So if you're like, they only work 30 hours a week for me, that's full time for purposes of this test. So just be careful on that if you do have any employees. Now, if you have, let's say you're a real estate broker and you have agents that are 1099 to you, you don't have any other employees. Cool, you're not you those aren't employees. The people you 1099 that are legitimate independent contractors, that's not counting in here. This is only real W-2 employees that you're employing in your business.

SPEAKER_00:

Also, let's say your kids, yeah, your kids, remember, or your spouse, don't violate that rule. You can all play in the solo. So think of it like a family solo plan, not just one person solo. And your business partner, if you have another owner in the company. Yeah. So that's the rule to qualify. Now, there's a lot of nuances again. We won't go there today, where you may do a SEP before you say, I'm gonna go to a so uh I'm because you could qualify for a SEP with employees at a different uh time measurement, but I'm not gonna open that can of worms. So there are stages and options as you're going into this arena. So get a consult, and this is something you've got to do before we have a special right now. You'll see it down in the description. We do it every year in the month of October because we got to get this done. If you call us in December, I don't think it's gonna happen. It's gonna be really hard.

SPEAKER_01:

So yeah, we want to get these solo cases set up so you can maximize your 2025 contributions. We're gonna go through contribution rules here in a second, uh, because that's about how to maximize the solo 401ks, get your dollars in. Um, but the the the you have the most options, the most opportunity to get the most contributions in if you set up the solo K plan in the year that you wanted to contribute. If you set it up later, you can still get money in. There's just some more restrictions and loopholes you got to jump through. So uh so that's why we like to just get them set up now if you're thinking about I want to make 2025 contributions. Um now, one other thing I want to say on the qualified to keep in mind is we're talking about businesses that sell goods or services. You could be a sole proprietorship, an S corporation, an LLC that's single member, you know, taxes a sole proprietorship, a C corporation, all right. Those all work and you can have a um uh solo 401k so long as that entity is selling goods or services. If the if the entity is like an LLC that owns a rental property, for example, that doesn't qualify. That's investment income or rental income for tax purposes. That's not selling goods or services. So 401ks were meant for businesses that have employees that are selling goods or services. Think of it that way. So whether this is a side hustle or main hustle for you, as long as you're selling goods or services, you're good. But investment asset type holding entities, real estate is the classic example. That entity cannot create a solo K plan.

SPEAKER_00:

Yeah, and I I just really on this qualification topic, there's not much more than that. You can set them up at any age. Uh, you could have as little income as 10 grand or less. You know, you've got to have wages in order to make a contribution if you're doing an S corporation. So again, the type of entity you have could play into it, but really um it's wide open unless it's a passive rental property type entity, or uh you've got employees that hit these triggering dates of uh anniversary. So super exciting. Uh 40 million Americans now, it's estimated, have a side hustle, and then you can have a solo 401k. I mean, it's just super cool. So, all right, yeah.

SPEAKER_01:

Even if, and I'll say even if you have a day job with a solo 401k, you know, and you got the side hustle. So you have a day job, you're matched, you're getting a match at work in your 401k, you can also get one in the uh side hustle. Yeah, totally. All right. Qualification, I'd be sorry, contribution amounts. Do you want to hear that? Well, let's talk about the setup and documents here for a second. I'll I can get that fast because I just want to like let's get this thing set up just so you know what's involved. There's two main things you're gonna need. One is a IRS pre-approved plan document. We have that, or you know, Fidelity or whoever you're using, okay. You need an IRS pre-approved plan document. Now we have that. And in our solo 401k plan, we say you can invest in whatever you want. So as you get out there and look at setting up a solo 401k plan, you want to be have in mind of like, well, what am I planning to invest into? And if you're like, well, I'm just gonna buy stocks, okay, go do that at TDM Airitrade. They can set up a solo K or Fidelity because they don't charge you for it because the only thing you can buy is what they sell. They'll make money selling you mutual fund stocks or ETFs in your account. But if you're like, no, no, no, I want to do real estate, I want to invest in crypto or precious metals or a private company. Well, they don't let you do that. That's what you need, a self-directed solo K, which is what our plan allows you to do. And so our solo 401k plan is open architecture, doesn't restrict your investments. And that's an IRS pre-approved plan. So that's part one. The other thing is you do want a separate EIN for this. This is gonna hold other investment assets. It's gonna have income, it's gonna sell stuff. You don't want to be using your social or your business EIN. The IRS will be looking for what's happening on that on your company return or your social. We want this, any of those investments or income. We want to be using that EIN for the solo 401k. So we'll get a separate EIN as well for you as part of that process. But our team's handling this, setting it up right, getting the documents, a plan document, adoption agreement, um, EIN, and we give you a uh also kind of a guide um on how to how to operate the solo 401k as well.

SPEAKER_00:

Yep. And this is not what this is the one area where going DIY is almost not even possible because you have to have this approved document, and people, it's not one sheet of paper like uh filing an LLC at the state, and you can try and mech it out yourself. But with this thing, it's gonna be a binder, and there's a lot of questions to answer in that document, and that's why we put a lawyer with you to knock it out, very affordable, and you're gonna be able to tailor it to what you want to do with it, and then we get you the EIN. Third step, open a bank account, and you're gonna start to put contributions in there. You can self-manage or self-administer or self-trustee your own solo 401k. Now we have a reporting service that's very affordable next to it where we can track things for you and do the tax returns. We'll come to that in a minute. But you really do control the destiny of this 401k. Yeah, and you can open LLCs, you can you need to open a bank account, you're gonna track the contributions, the matches. Um pretty exciting.

SPEAKER_01:

Yeah, and we help with all that bank account setup, custodial account at directed to hold the investments and process the money. You can get a checking account link to that. Um, so you can write the checks and go make investments as trustee, as Mark said. All right, now let's hit contributions. You don't want to make sure we got the setup stuff in there because you you do that's that's the key part here is we actually need that plan set up, signed, and adopted by your company. And remember that that solo 401k plan is a plan that the company adopts for the benefit of its employee, which happens to be you, where it's Vandalay Industries and your Art Vandalay, you know, the solo 401k plan is at the Vandalay Industries 401k, and you, Art Vandalay, have an account in the solo 401k that could be Roth, could be traditional, you could be doing Roth and Traditional in that as well. Okay. Did you like the Art Vandalay? I didn't even get a chuckle on that.

SPEAKER_00:

I well, I maybe I've heard that joke so many times. I should have given you kind of the gratuitous laugh. I am so sorry. For those Seinfeld fans out there, yeah, Art Vandele has got a really He's a legend. I'm a legend.

SPEAKER_01:

Yeah. All right, contributions. Okay, now here's getting money in the solo 401k. I mentioned earlier you can put$70,000 a year into a solo 401k. That's like 10 times what you can put into an IRA. That's one reason we love this. So if you qualify for the solo 401k, you're someone that's self-employed, this is the an awesome vehicle to get money in, whether you're doing Roth contributions and growing tax-free dollars, or you're doing traditional dollars and taking a huge deduction. This is uh an awesome strategy. Okay, so there's two components of how that 70K works out. The first thing is the employee contribution, which for 2025 is$23,500. As long as you make$23,500, you can put in$23.5. Okay. I'm sure we'll get to an S-corp scenario here for those of you that are S Corp owners, because that's probably what you should be if you're a business owner making good money. The second component of what you can put in is the employer contribution. So that first$23.5 is employee. That's dollar for dollar on what you make. If you make$10,000, you can put in$10,000. If you make$50,000, you can put in$23.5. Okay. Um, that's just the max and it goes dollar for dollar. The second component's employer. And this gives us another$46,500 we could do that. So let's say your W 2 is$100,000. That means you could put in$25,000, right? As the employer contribution on top of the$23,500, which would get you to$48,500 in that example. All right.

SPEAKER_00:

Now I want to point out just two things here that are interesting, everybody. Let's say you are not an S corporation, you're only allowed to put in 20% of your profit. So if you're gonna make$100,000, then you're gonna only be able to put in that 20%.

SPEAKER_01:

Plus the 23.5. So you get 20 grand plus the 23.5, but that's only 43,500 instead of 48,500.

SPEAKER_00:

And the interesting point is that as you start to evolve to an S corporation, we want to be cramming down your salary so you're not paying as much FICA and then maximizing your 401k. And there's it it's a balancing act, and there's a sweet spot because we don't want to pay so much in FICA that you just get to put in a few extra dollars on your 401k. It's not worth the traction a lot of times, it's not worth the squeeze. And so we want to like be very artful this time of year. This is why the fourth quarter is so busy for us, because we're pulling the trigger on the 401k and then we're tidying up your salary levels, which brings me to the second point. Matt, I want you to comment on both of these. So that first one is kind of that magic spot, is also are you calling it the magic spot now? Sweet spot, magic spot, and I'm not I'm and we're gonna get in trouble. I'm about to talk about um your wife here, and that is uh putting your spouse on roll. I don't know what you were talking about. I'm what were you thinking? Um, but we're gonna talk about putting your spouse on payroll. Um, I was just teaching a class yesterday to um a group of RV owners, and they're living the dream full-time RVers traveling around the country. And the big question was, well, do I put my spouse on payroll so they can get social security and also start paying up? Well, that's a it's a myth that that's a that's not a good thing to do, because a spouse is gonna get half of their working spouse's uh social security, and it's averaged over 35 years of income. So we'd have to start giving you some major salary before you'd ever catch up to the half that you're already entitled to from your working spouse. So I'm just gonna get to the the uh reveal here, and that is the only time you want to put your spouse on payroll is so you can put money in his or her 401k. So now we want to find that perfect salary level for them without doing too much either. And sometimes just the deferral is fine. If it's 235, let's put the spouse on payroll for 25 grand, boom, put away their that more than they could in an IRA, they still can do an IRA, and so we're getting that magic. So finding your the moral of the story is we want to find the perfect salary for you and possibly for your spouse, so that we're maximizing both contributions without paying the dreaded self-employment tax too much.

SPEAKER_01:

Yeah, and keep in mind that 70K amount that you can put in is is an individual max. So, like that's not for the solo K in total. This is your solo K plan, you know, like Art Vandal could be doing 70K and then Valerie Vandalay. Valerie Valerie. I'm going to like you know, sticking with the B's. So Valerie Vandalay, she could be doing 70K in hers too, right? So um now again, you'd need the right W-2 to max that out, and I think that gets you to like 160K or something on a W-2, but but just to get that total max out. But think of this, just think of you both did 50K on your W-2, right? You're doing 235, plus you get 12,500, which is 25% of the 50K, right? What are we at now? That is 45, that's$46,000. No, sorry,$36,000 that I can put in a solo K. My spouse does a$50,000 W2, they can do$36,000 into a solo 401k as well, that's under their name and an account for them. So um, same thing. Your kids are in the business working, and you know, maybe they're making five grand, ten grand, they could be dropping money in a solo 401k too.

SPEAKER_00:

Yeah, and I, you know, if we're gonna stay with the Seinfeld theme, uh, let's presume George Costanza would have pulled off his wedding with Susan. You remember Susan? That's right. That's right. They were gonna get married, and then they would have had to man manage that because Vandalay Industries was George's dream company. He always wanted to be our butt. How did Susan die? Little tribute. Remember how Susan died? They never got wedding invitations, cheap wedding invitations. Oh my gosh, it was so funny. All right, well, contributions is really the the artistic and the strategic spot of this whole process because the solo 401k gives you so much flexibility that once you're in the party, you're like, okay, I got all sorts of options. And as Matt alluded to earlier, you could do a Roth contribution, and then the company could be a traditional, meaning the company gets a write-off for the match, but you that Roth bucket inside your 401k could be invested differently. Also, you could convert on day two the company match to Roth, and then have your Roth IRA on the site. We call that the mega backdoor Roth. So you kind of get this, you can start really playing around with this if you want just Roth money or if you want the write-off. And that's a big debate. I mean, we've gotten into almost fist fights at conferences on which one's better, a Roth or a traditional contribution, and how old are they and what's their income? And oh my gosh. I mean, it's just it's I don't think AI can even solve for that one.

SPEAKER_01:

Yeah, and I'll even say this on rollovers you can still roll over. You got an old employer 401k or even a traditional IRA, you can roll that into the solo 401k. Roth IRAs, by the way, can't be rolled in or transferred to a Roth solo 401k. You can go for Roth 401k out to Roth IRA, but you can't go Roth IRA into Roth 401k. So, but that solo K, it's good for new contributions, as we've been going through here, but also for any transfers and rollovers of other retirement account dollars you have. Like I said, the old employer 401k or even a traditional IRA or SEP IRA could get moved in and consolidated into this solo 401k.

SPEAKER_00:

So another unique strategy here, just like Matt said, is you might have old 401k or IRA money, and you're like, I don't know if I'm gonna make new contributions this year, but I sure love that solo 401k because I can borrow from it. So you could take old IRA money or old work employer money and roll it into your new solo 401k and borrow up to 50% or$50,000, which you whichever's less. And now you're paying interest back to yourself tax-free into your 401k. So that 401k could be the small business loan you're looking for or something smart, not a trip around the world. But let's use it, but that's something you can't do in an IRA, but the solo 401k would allow you to do.

SPEAKER_01:

Yeah, and that's called the participant loan, unique to 401ks. Our plan document allows for that. Um you pay that back over five years, by the way, with at least quarterly payments. You could do it monthly or at least quarterly. But we've seen a lot of people use that for to start up a small business. They start up their new S corporation, they roll over existing IRA or old 401k dollars, they go invest some of it and they take a loan out. It's not a distribution, not taxable, no penalty. They can access that money to buy some maybe inventory or get some of your business startup costs going, some education, training, whatever it might be. And um, then you're paying it back, like Mark said, into your own 401k. And if you use it for a business purpose, you're expensing that interest as well. It's a pretty freaking awesome strategy. Um, and I love that one. I didn't even think about that one. Another great benefit on the solo K. Um, all right, let's hit investing for a second here. Just we want to make sure you know one thing. And of course, this is, you know, we have a whole separate podcast on this, the directed IRA podcast where you talk about self-directing. When we're talking about a solo K, you can go buy stocks, bonds, and mutual funds. Okay, I'm not against that, but that's not all that you're you can invest in. Like when you have a self-directed solo 401k, which is what we set up, you can buy real estate, you can invest in a private company, you can buy crypto, you can buy precious metals, okay, you can invest in a private fund. These are all assets your solo 401k can own and invest in. We're not saying you have to go to Wall Street and buy more stocks, bonds, annuities, or mutual funds.

SPEAKER_00:

Yeah. It's just super exciting. And it's all about the rate of return, folks. Don't get fixated on maybe some of the uh costs or issues that seem like they're hurdles. Those that's a it's a cost of doing business and just put it into the equation. You might be able to get a zero cost 401k at Fidelity, but like Matt said, you can just buy Fidelity product. And so you're like, oh, well, I gotta pay a thousand to go set up this 401k over here, and I get, you know,$300 a year,$400 a year, whatever it is, and I got to maintain it. Yeah, but what's your rate of return inside that solo 401k? Investing in what you know and investing in something else that could get you two or three times the return you would get over here and just a simple mutual fund. Not that they're not bad, but wouldn't you like to do both? And you can. And one other thing we need to mention in this whole process is if you already have a solo 401k, you may be like, darn, I'd love to have one of those that I can self-direct, and this is awesome. This is what I wanted and never got, or I never dreamed it was possible. Well, then you can make an appointment, and instead of setting up a brand new one, we would restate your current one with a new plan document that it gives you this freedom. So you could get to the same point without having to go through uh a big redo that's uh cumbersome and expensive.

SPEAKER_01:

Yeah, and we see that quite a bit with someone that say had a solo 401k at TD Maritrade, but that solo 401k plan document only lets them buy stocks, bonds, and mutual funds. They're like, well, I want to buy this rental property or invest in this crypto. You know, okay, well, we will restate that solo 401k plan. It's still the same name, it's still the same EIN, still the same plan, but we will restate that to a plan that allows you to own these other private alternative assets. All right, let's talk about the last one here on the list, which is maintaining the solo 401k. There's really two important components to this. Um, I mean, as a general rule of thumb, the IRS requires you to have good records of what put in the been put in the 401k and what it's been invested into, um, income in it, expenses, and all that. But there's really two criteria of things you got to make sure you're doing. One is you got to make sure your plan documents stay up to date. The IRS requires you to, at a minimum, have your plan documents updated every six years. When we're doing a solo 401k plan for you, when you have an account with directed where we handle the account for you, we're gonna do your annual um amendments. Sometimes it's every two to three years, the IRS will require it. But we send those out and we automatically update your plan for you. The second requirement is a tax return. Generally, solo Ks that are under 250 grand do not need to file a tax return. And that's total assets at the end of the year. Once your solo 401k has more than$250,000 of assets on December 31st at the end of the year, now it has to file a tax return. This tax return, there's a simplified version of it called a 5,500 EZ. There's no tax due on it, but this is a disclosure filing requirement that you have to file for your solo 401k. So again, this is something we automatically handle for you. So when you have an accountant directed, we include all this maintenance for you once the solo 401k plan is set up. So make sure for any of you that have a solo 401k are setting up that you understand the filing requirements for this and that those that 5500 EZ is getting filed if you have more than 250K in assets in it, and also that your plan documents stay up to date.

SPEAKER_00:

Gosh, what wonderful summary there, Matt. And I just want to add that don't forget right now, if you're listening here in the next few weeks from our uh uh from the date of this, that we have a annual special. And the details are down below. We can get you a 401k plan set up with the law firm, and then directed IRA is there as your custodian to help make sure those tax returns are done and do the reporting. So you kind of get that yin and yang so that you get the right plan and then you know that the maintenance is taken care of. Again, extremely affordable compared to a full blown employer plan.

SPEAKER_01:

Yeah. Yeah. So click the links below, get over to KQS Lawyers. That's our law firm, directed IRA. That's where we handle maintenance and custodian of the account for your solo 401k. We've got a lot of other resources there to help you, a whole team behind us to help make. Make sure you're successful at this. And um, please make sure you're subscribed to the podcast if you're not already. Please share it with your friends and family. Give us kudos or you know, a like or a five star, whatever you can do. We want to help get the word out there to more business owners and investors. And we'll see you next time. Thanks for being here.

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Mark J. Kohler

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