Important Forms for Solo 401k Owners

Owning a Solo 401k gives you the flexibility to build retirement savings on your own terms. But managing that flexibility also means staying on top of a few key forms each year. These forms help you report your plan’s activity, keep your account in good standing, and avoid unnecessary IRS penalties.

Understanding which forms apply can feel confusing, especially if your account has grown or if you recently made changes such as a rollover or distribution. The good news is that most Solo 401k owners only deal with a handful of filings, and each one serves a specific purpose in maintaining compliance.

This guide explains the most important Solo 401k forms you may need to file, what each one does, and when it typically applies. By the end, you will have a clear checklist of which forms might apply to your situation.

📌 Also read: How to File Taxes as a Sole Proprietorship (Forms, Deductions, And Deadlines)

Key IRS Forms Every Solo 401k Owner Should Know

Managing a Solo 401k involves more than just making contributions and choosing investments. Certain IRS forms may apply depending on your account balance, plan activity, or distributions. Understanding when these forms are required helps you stay compliant and avoid penalties.

Below are the most common forms that Solo 401k owners should be familiar with and when each typically applies.

Form 5500-EZ

Form 5500-EZ is the annual return form that provides the IRS with a summary of your Solo 401k’s financial activity. It reports your plan’s total assets, contributions, rollovers, and loans as of year-end. You do not need to list individual investments, but you must report the total value of your plan’s assets accurately.

This form helps the IRS confirm that your Solo 401k remains compliant and that plan assets are being tracked correctly. Even though it might look straightforward, it is one of the most important compliance steps for Solo 401k owners.

IRS Links

Who Is Required to File

You are required to file Form 5500-EZ if either of the following applies:

✅ Your Solo 401k plan has over $250,000 in total assets as of December 31.
✅ You terminate your Solo 401k plan and distribute or roll over all funds to another account.

📝 Note: Carry generally recommends that Solo 401k owners file Form 5500-EZ every year as a precaution, even if their plan balance is below $250,000. This is not an IRS requirement but a risk-management choice that helps keep your filing record consistent.

If you have filed this form in prior years, it is a good idea to continue filing, even if your balance later drops below $250,000. This prevents gaps in your filing history that might trigger IRS questions about why you stopped submitting the form.

You may also want to file voluntarily when your plan’s value is close to the $250,000 mark, to stay on the safe side.

Why This Form Matters

Filing Form 5500-EZ serves as an official record of your plan’s compliance and starts the three-year statute of limitations period for IRS review. Once filed, the IRS typically cannot reassess income taxes for periods after that limitation expires.

In rare cases, this timeline can protect you if your plan later faces unexpected rule changes or disqualification issues.

Failing to file on time can lead to substantial penalties—the IRS charges $250 per day, up to a maximum of $150,000. Filing on schedule avoids these costs and keeps your plan in good standing.

How to File Form 5500-EZ

You can file Form 5500-EZ in two ways:

✅ Online through EFAST2 – The electronic filing system is free, and completing the form typically takes about one hour.

✅ By mail – Print and fill out this form, then send it to:

Department of the Treasury
Internal Revenue Service
Ogden, UT 84201-0020

📝 Note: Carry is a platform and does not provide filing assistance or submission services for Form 5500-EZ. You are responsible for preparing and filing the form directly with the IRS.

📌 Also read: Form 5500-EZ: Why All Solo 401k Plan Owners Should File One

Deadline

Form 5500-EZ is due by the last day of the seventh month following the end of your plan year.

✅ If your plan year ends December 31, the deadline is July 31.
✅ If your plan year ends March 30, your filing deadline is October 31.

Submitting early gives you time to correct errors before the due date and avoid potential penalties.

Form 1099-R

Form 1099-R is used to report any movement of funds or assets out of your Solo 401k account. This includes withdrawals, rollovers, conversions, and required minimum distributions (RMDs). Even if the transfer is tax-free, such as a rollover or Roth conversion, the IRS still requires you to file this form to document the transaction.

This form ensures the IRS receives accurate records of how your retirement funds are distributed or transferred, helping you stay compliant and avoid discrepancies during tax reporting.

IRS Links

Who Is Required to File

You are required to file Form 1099-R whenever $10 or more leaves your Solo 401k plan.

Common examples include:

✅ Taking a distribution or withdrawal of $10 or more.
✅ Completing an in-plan Roth conversion (moving money from your pre-tax Solo 401k to your Roth Solo 401k).
✅ Performing a rollover to another retirement plan, such as a Traditional IRA or Roth IRA.
✅ Taking a required minimum distribution (RMD) once you reach the applicable age.
✅ Conducting an in-service direct rollover to a Roth IRA (if your plan permits it).
✅ Failing to repay a Solo 401k loan on time.

Let’s review how each of these actions works in practice.

Taking a Distribution or Withdrawal

If you take a distribution of more than $10, you must report it on Form 1099-R, whether it is an early distribution (before age 59½) or a qualified distribution (after age 59½).

📝 Note: “Ordinary income” refers to your regular taxable income rate for that year.

In-Plan Roth Conversions

If you move funds from your pre-tax Solo 401k to your Roth Solo 401k, this is called an in-plan Roth conversion. Although the funds remain in your Solo 401k plan, the IRS still requires the transfer to be reported on Form 1099-R.

The conversion is a taxable event because pre-tax funds are being moved into a post-tax account. The converted amount is added to your taxable income for that year.

✅ Good to know: You do not owe the 10% early distribution penalty for Roth conversions. The penalty only applies if you withdraw funds from your account entirely.

Pre-Tax vs. Roth Contributions

Here is a quick reminder of how pre-tax and Roth Solo 401k accounts differ:

You contribute with pre-tax income and receive a tax deduction for that year. Withdrawals in retirement are taxed as ordinary income.

✏️ Hypothetical Example: If you earn $50,000 and contribute $10,000 pre-tax, your taxable income becomes $40,000.

You contribute with after-tax income, receive no deduction, but your qualified withdrawals in retirement are tax-free.

Mega Backdoor Roth Solo 401k

A Mega Backdoor Roth Solo 401k can allow you to contribute more to your retirement plan than the standard Roth limits. It uses a strategy of making after-tax contributions and then converting them into Roth funds.

Contribution limits for 2025:

✅ Employee elective deferral: $23,500 if under age 50, or $31,000 if age 50 or older (includes the $7,500 catch-up).
✅ Total combined contributions (employee + employer): $70,000, or $77,500 if age 50 or older.

Only employee contributions can be made as Roth. Employer contributions are always pre-tax.

To execute this strategy, funds are first deposited into an after-tax account and then rolled into your Roth Solo 401k or a Roth IRA.

📌 Also read: The Mega Backdoor Roth Solo 401k Explained

In-Service Distribution to a Roth IRA

If you perform a Mega Backdoor conversion and choose to roll the funds into a Roth IRA instead of your Roth Solo 401k, that transaction also requires Form 1099-R reporting. The IRS treats it as a distribution from your Solo 401k.

Required Minimum Distributions (RMDs)

Once you reach age 73, you must begin taking required minimum distributions (RMDs) from your Solo 401k each year. This rule applies to most retirement plans.

You can use the IRS Uniform Lifetime Table to calculate your annual RMD amount starting in 2025 and beyond. Each RMD taken must be reported on Form 1099-R.

📝 Note: The IRS can impose significant penalties for failing to take or report RMDs, so it is essential to stay on schedule.

Failure to Repay a Solo 401k Loan

If your Solo 401k allows loans, you can borrow up to 50% of your account value (maximum $50,000). The standard repayment period is five years, or up to 15 years if the funds are used to purchase a primary residence.

If you do not repay the loan on time, the outstanding balance is treated as a distribution and must be reported on Form 1099-R. This may trigger taxes and, if you are under age 59½, the 10% early withdrawal penalty.

How to File Form 1099-R

You have two options to file:

✅ By mail: Order an original Form 1099-R from the IRS website and mail the completed copy directly to the IRS.

✅ Online: File electronically using an IRS-authorized electronic filing provider, such as tax1099.com, to ensure the form is correctly submitted.

📝 Note: Electronic filing is faster and reduces the chance of errors or delays.

Deadline

Form 1099-R must be:

Filing on time helps you avoid penalties and keeps your Solo 401k activity fully documented.

Form 945

Form 945 is used to report federal income tax withheld from payments that are not related to wages or salaries. For Solo 401k owners, this includes federal income tax withheld from plan distributions, such as when funds are paid directly to you rather than rolled over into another retirement account.

This form ensures that any tax withheld from your Solo 401k distribution is accurately reported and remitted to the IRS.

IRS Links

Who Is Required to File

Solo 401k owners must file Form 945 if federal income tax was withheld from a distribution made from their plan.

When it applies:

✅ You took a distribution from your Solo 401k and your plan withheld federal income tax.
✅ You received a direct payment from your plan rather than rolling the funds into another qualified retirement account.

The 20% mandatory withholding typically applies to eligible rollover distributions paid directly to you. This is separate from the 10% early distribution penalty, which is an individual tax applied when you withdraw funds before age 59½.

📝 Note: Most Solo 401k owners will not need to file Form 945 unless their plan has withheld federal income tax from a payout. However, once withholding occurs, filing this form becomes mandatory.

How to File Form 945

You can submit Form 945 either electronically or by mail. The method depends on your preference and whether you are including a payment.

✅ Electronic Filing: You can file through IRS.gov/EmploymentEfile or an approved electronic filing provider.

✅ Paper Filing: If you prefer to mail a paper return, the correct mailing address depends on your state and whether you include a payment. Before mailing, always confirm the latest “Where to File” information on the IRS website because mailing addresses can change.

Mailing Addresses

If you’re in…	Without a payment…	With a payment…
Connecticut, Delaware, District of Columbia, Georgia, Illinois, Indiana,Kentucky, Maine, Maryland, Massachusetts, Michigan, New Hampshire,New Jersey, New York, North Carolina, Ohio, Pennsylvania, RhodeIsland, South Carolina, Tennessee, Vermont, Virginia, West Virginia,Wisconsin	Department of the TreasuryInternal Revenue ServiceKansas City, MO 64999-0042	Internal Revenue ServiceP.O. Box 806534Cincinnati, OH 45280-6534
Alabama, Alaska, Arizona, Arkansas, California, Colorado, Florida,Hawaii, Idaho, Iowa, Kansas, Louisiana, Minnesota, Mississippi,Missouri, Montana, Nebraska, Nevada, New Mexico, North Dakota,Oklahoma, Oregon, South Dakota, Texas, Utah, Washington, Wyoming	Department of the TreasuryInternal Revenue ServiceOgden, UT 84201-0042	Internal Revenue ServiceP.O. Box 932300Louisville, KY 40293-2300
No legal residence or principal place of business in any state	Department of the TreasuryInternal Revenue ServiceP.O. Box 409101Ogden, UT 84409	Internal Revenue ServiceP.O. Box 932300Louisville, KY 40293-2300
Special filing address for exempt organizations; governmental entities;and Indian tribal governmental entities; regardless of location	Department of the TreasuryInternal Revenue ServiceOgden, UT 84201-0042	Internal Revenue ServiceP.O. Box 932300Louisville, KY 40293-2300

Deadline

Form 945 is generally due January 31 of each year. If all tax liability payments for the prior year have already been made in full and on time, you have until February 10 to file.

Key points to remember:

✅ You are not required to file in years where no withholding occurred.
✅ If you fail to file Form 945 or pay the required taxes, you may face a trust fund recovery penalty equal to 100% of the unpaid tax amount.

📝 Note: The trust fund recovery penalty applies to anyone responsible for collecting or paying withheld taxes who willfully fails to do so. Staying compliant with Form 945 prevents costly penalties and unnecessary IRS attention.

Form 8606

Form 8606 is used to report nondeductible contributions to Traditional IRAs, track your IRA basis, and report Roth IRA conversions. It helps the IRS determine what portion of your IRA withdrawals is taxable and what portion represents after-tax contributions.

For Solo 401k owners, this form does not apply to Mega Backdoor Roth Solo 401k transactions, since those are handled within your 401k plan and not through an IRA. However, understanding when Form 8606 applies is still important if you also maintain IRA accounts outside of your Solo 401k.

IRS Links

Who Is Required to File

You must file Form 8606 in the following cases:

✅ You make a nondeductible contribution to a Traditional IRA.
✅ You convert funds from a Traditional IRA to a Roth IRA (commonly referred to as a “Backdoor Roth IRA”).
✅ You take a distribution from a Roth IRA that includes earnings and after-tax contributions.

For Solo 401k owners, remember that Form 8606 is not used for conversions inside the Solo 401k plan, even if you are completing a Mega Backdoor Roth transaction. That strategy is reported through Form 1099-R, not Form 8606.

📝 Note: A Roth IRA cannot be rolled over into a Solo 401k or converted into the plan’s designated Roth account. The permitted route is: Traditional IRA (nondeductible) → Roth IRA conversion, which must be reported on Form 8606.

When to File Form 8606

File Form 8606 with your annual federal income tax return for the year in which you made the nondeductible IRA contribution or completed a Roth conversion.

Key uses:

If you contribute to a nondeductible Traditional IRA, the form confirms that the contribution was made with after-tax dollars so those funds are not taxed again at withdrawal.

Benefits of Converting from a Nondeductible IRA to a Roth IRA

Converting a nondeductible Traditional IRA into a Roth IRA can be advantageous for long-term retirement planning. When done properly:

✅ Qualified Roth IRA withdrawals in retirement are tax-free once you meet both the age 59½ and five-year holding requirements.
✅ Your Roth IRA can continue to grow potentially tax-free throughout your lifetime.
✅ Roth IRAs are not subject to required minimum distributions (RMDs) during your lifetime, unlike Traditional IRAs or Solo 401k plans.

📝 Note: A nondeductible IRA can be converted to a Roth IRA, but not to a Roth Solo 401k. Each account type follows different IRS reporting and contribution rules.

How to File Form 8606

You can file Form 8606 either by mail or electronically along with your annual tax return.

✅ Electronic filing: If you e-file your taxes, include Form 8606 with your electronic return submission.

✅ Paper filing: If you file a paper return, include Form 8606 with your federal income tax filing and send both to the address designated for your Form 1040 return.

📝 Note: Keep a copy of each Form 8606 you file. The cumulative total of nondeductible contributions establishes your IRA’s “basis,” which will reduce future taxable income when you withdraw funds.

Penalties for Missing or Incorrect Filings

Failing to file Form 8606 can result in a $50 penalty. If you overstate your IRA basis (for example, by reporting more after-tax contributions than you actually made), the penalty is typically $100.

The 10% early distribution penalty applies only to early withdrawals — not to failing to file this form.

Deadline

Form 8606 must be filed by the federal tax deadline, usually April 15 of each year, unless the IRS extends the deadline for that filing season.

Filing on time helps ensure your IRA records remain accurate and prevents errors in future tax years when you begin taking withdrawals.

Wrapping It Up

Solo 401k filings generally hinge on plan activity, including contributions, rollovers, distributions, conversions, and year-end balances that meet reporting thresholds. Keeping clear records throughout the year can make it easier to match transactions to the correct forms, such as Form 1099-R or Form 5500-EZ, and file them on schedule. 

When the required filings are unclear, or a transaction falls outside routine contributions, a tax professional may help confirm the correct reporting approach. Regular recordkeeping and timely reviews can reduce surprises and support clean, accurate filings.

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The Carry Learning Center is operated by The Vibes Company Inc. (“Vibes”) and contains generalized educational content about personal finance topics. While Vibes provides educational content and technology services, all investment advisory services discussed on this website are provided exclusively through its wholly-owned subsidiary, Carry Advisors LLC (“Carry Advisors”), an SEC registered investment adviser. The information contained on the Carry Learning Center should not be construed as personalized investment advice and should not be considered as a solicitation to buy or sell any security or engage in a particular investment, accounting, tax or legal strategy. Vibes is not providing tax, legal, accounting, or investment advice. You should consult with qualified tax, legal, accounting, and investment professionals regarding your specific situation.

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