The Surface Transportation and Veterans Health Care Choice Improvement Act of 2015

Solo 401k Plan

The Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 (H.R. 3236), signed by President Obama on July 31, 2015, extends the due date for many tax returns.

Among those of importance to retirement plans, the bill provides that the maximum extension for the returns of employee benefit plans filing Form 5500 shall be an automatic 3 1⁄2-month period ending on November 15 for calendar year plans. (edit-- new dates reverted back to original Oct 15th)In addition, the maximum extension for the returns of organizations exempt from income tax filing Form 990 (series) shall be an automatic 6-month period ending on November 15 for calendar year filers.

Solo 401k Plan: Your Opportunity for Checkbook Control of Your Future

Solo-k Plan

After December 31, 2016, the rules in Treasury Regulation 1.401(b)-1 will determine the deadline for adopting legally required plan amendments. 

The extended deadline to adopt plan amendments required to maintain a retirement plan’s tax qualified status no longer applies.  This means that plan sponsors no longer have until the end of the remedial amendment cycle to adopt an amendment to correct a legally required plan provision. 

  Instead, for single-employer plans, Treasury Regulation 1.401(b)-1 generally  requires a plan to be amended for a legally required provision by the later of:

          A.   the last day of the plan year in which the legally required provision became effective with respect to the plan, or  

          B.   the plan sponsor’s income tax return filing deadline (including extensions) for the tax year in which the legally required provision became effective with respect to the plan. 

Plan sponsors should ensure that any amendments required in connection with determination letters recently issued by the IRS have been adopted timely and dated accordingly.

Solo 401k Plan: Your Opportunity for Checkbook Control of Your Future

IRS Finalizes 5500 EZ Tax Relief

Rev. Proc. 2015-32 provides a new permanent procedure for Solo 401k plans to receive penalty relief for late filed 5500 EZ returns without having to demonstrate reasonable cause for the late filing. Eligible plans include plans covering only the business owner and their spouse or one or more partners and their spouses that have not received a notice from the IRS regarding late returns. The permanent relief does include a filing fee of $500 per delinquent return, up to a maximum of $1,500 per plan. In addition, Rev. Proc. 2015-32 requires a Form 14704, Transmittal Schedule, be submitted with the late returns.

In case you need it, a good practice is to file for an extension each year to give yourself an extra 6 months to file each year.

Solo 401k Plan: Your Opportunity for Checkbook Control of Your Future

" Optimal Investment Strategy" According to Dept of Labor

In their most recent proposed regulation the Dept of Labor is suggesting the following investment options. If adopted by the Plan sponsor these options would provide an exception for the  plan advisor of further liability:

 The DOL believes advisors who recommend portfolios consisting of low-management-fee index funds, passively managed funds or exchange-traded funds presumptively could be treated as acting in a manner consistent with their fiduciary obligation, since these investment options “present minimal risk of abuse.”

 The DOL justifies this position by noting it is “consistent with the prevailing view in the academic literature that posits that the optimal investment strategy is often to buy and hold a diversified portfolio of assets calibrated to track the overall performance of financial markets.”

Solo 401k Plan: Your Opportunity for Checkbook Control of Your Future

What is IRS Form 3115?

Solo 401k

WHAAAAAT?

IRS Form 3115 is an Application for Change in Accounting Method. The IRS recent final regulations  require every landlord owning rental property prior to 2014 to change their accounting treatment of classifying expenses for repairs or improvements. Changing the accounting treatment requires changing the accounting method, and hence we are brought to Form 3115.

The IRS  has streamlined the process for acceptance. When you file Form 3115, your application will be automatically approved by the IRS. You  file Form 3115 with your timely prepared tax returns for this year, at the latest being October 15, 2015. 

You only need to file one 3115 for each legal entity owning property prior to 2014. If you have several properties under one legal entity, you still only need to file one Form 3115. However, if you placed properties in separate entities, each entity will need to file Form 3115 which is going to be a costly headache. 

Check with your tax professional to see how the Form 3115 affects your real estate investments.

Solo 401k plan:Your Opportunity for Checkbook control of your future