Next year, I plan to switch my Solo 401k to a SIMPLE IRA, as I plan to slow down my side gig activity and will no longer need the higher contribution limits of the solo 401k (and I never did any backdoor Roths or mega backdoor Roths, so that's not a concern for me). This is my plan/timeline so far, and I just wanted to make sure I'm doing this right:
January 2024: Made my annual contribution for 2023 ($20k).
November 2024: Make my annual contribution for 2024 (Uncertain yet but most likely $10k or less).
December 2024: Request to terminate my Solo 401k and rollover assets to a Traditional IRA. I'll be doing this entirely within Schwab, so I don't anticipate long delays since there won't be any checks being mailed.
January 2025: File my final EZ-5500. Notable values in the form:
- Assets at the end of the year needs to be $0
- Total number of active participants at the end of the plan year needs to be 0
- Contribution Received: Should this be $10k (for 2024) or does this also need to include the $20k contribution I made for 2023? I am a little worried if it needs to include both because that goes over the contribution limits.
- Do I need to check the a short plan year return checkbox in addition to the final return filed for the plan since I technically terminated the plan before Dec 31st? Or is it enough that the month it's terminated is December?
January 2025: Start a new SIMPLE IRA. My understanding is that as long as I terminated my solo 401k in 2024, then starting in the new calendar year in 2025, I'll be able to start a SIMPLE IRA without issues.
And the main thing I'll need to pay attention to going forward is that the contribution deadlines for SIMPLE IRAs are January 30th of the subsequent year for employee contributions and tax filing date for employer contributions, as opposed to my solo 401k, where I could wait until tax filing time for all of the contributions.
Am I missing anything?
Thanks in advance for your time!
January 2024: Made my annual contribution for 2023 ($20k).
November 2024: Make my annual contribution for 2024 (Uncertain yet but most likely $10k or less).
December 2024: Request to terminate my Solo 401k and rollover assets to a Traditional IRA. I'll be doing this entirely within Schwab, so I don't anticipate long delays since there won't be any checks being mailed.
January 2025: File my final EZ-5500. Notable values in the form:
- Assets at the end of the year needs to be $0
- Total number of active participants at the end of the plan year needs to be 0
- Contribution Received: Should this be $10k (for 2024) or does this also need to include the $20k contribution I made for 2023? I am a little worried if it needs to include both because that goes over the contribution limits.
- Do I need to check the a short plan year return checkbox in addition to the final return filed for the plan since I technically terminated the plan before Dec 31st? Or is it enough that the month it's terminated is December?
January 2025: Start a new SIMPLE IRA. My understanding is that as long as I terminated my solo 401k in 2024, then starting in the new calendar year in 2025, I'll be able to start a SIMPLE IRA without issues.
And the main thing I'll need to pay attention to going forward is that the contribution deadlines for SIMPLE IRAs are January 30th of the subsequent year for employee contributions and tax filing date for employer contributions, as opposed to my solo 401k, where I could wait until tax filing time for all of the contributions.
Am I missing anything?
Thanks in advance for your time!
Statistics: Posted by vaylie — Fri Feb 09, 2024 9:51 pm — Replies 0 — Views 91