Your solo 401(k) may owe a July 31 filing, and your broker won't do it

Jun 2026 · 4 min read

If you sponsor a retirement plan, even a solo 401(k) you set up years ago and rarely think about, there may be a federal form due July 31 that nobody is going to remind you about. It is called Form 5500, and it is not a tax return. But whether you file it, extend it, or ignore it is the difference between $0 and a penalty that runs $250 a day. The July 31 date is for a plan whose year ends December 31, which covers most solo 401(k)s.

The reason this one bites is that it produces no invoice and no reminder. Your brokerage does not file it for you. It shows up as a surprise only when a penalty notice arrives.

Who actually owes the form

Form 5500 is how the government confirms your plan exists, what it holds, and that it is being run properly. Which version you file depends on who the plan covers.

If your plan covers only you and your spouse, a solo 401(k), you file Form 5500-EZ, but only once total assets across all your one-participant plans top $250,000 at year-end. Below that, there is usually no filing. Two exceptions catch people. You file in the plan's final year no matter the size, and the $250,000 is a combined number, so a single IRA rollover into your solo 401(k) can push you over the line in one transaction and create a filing you had no reason to expect. Adding a cash-balance plan does the same, since those assets combine with the 401(k) for the test.

The moment your plan covers a non-owner employee, it is a different animal. It becomes a full ERISA plan and files Form 5500 or the shorter 5500-SF, with more involved reporting.

What it costs to miss it, and how cheap the fix is

The IRS penalty is $250 per day, up to $150,000 per late return. But the relief programs are generous if you move first.

The pattern is the whole lesson. Filing Form 5558 by July 31 gives you a one-time extension, no approval needed, and costs nothing. If you already missed a year, the IRS late-filer program for solo plans resolves it for a flat $500 per return, capped at $1,500. But both only work if you move first. The relief program is generally off the table once the IRS has assessed a penalty, so acting before that notice lands is the whole game.

Where it goes wrong

• Assuming your custodian handles it. Fidelity, Vanguard, and Schwab report your contributions and balances to you. They do not file Form 5500 for you. That is the sponsor's job, which means yours.
• Missing the $250,000 crossover. A rollover or a strong market year can push you over the threshold without any new contribution. Check your year-end value every year.
• Filing Form 5558 late. The extension is automatic only if the request is in by July 31. File it in August and you have no extension.
• Assuming it is a paper form. For plan years starting in 2024 or later, if your business has to file 10 or more returns of any kind with the IRS that year, counting W-2s, 1099s, and your income and payroll returns, the 5500-EZ must be filed electronically through the EFAST2 system.
• Gambling on reasonable cause. If you skip the relief program and argue your way out instead, and the IRS disagrees, you can go from owing $500 to owing far more.

What to check before July 31

• What were your total one-participant plan assets on December 31? Over $250,000 means a 5500-EZ is likely due.
• Did a rollover, a strong year, or a second plan push you over the line?
• Did you close or fully distribute a plan last year? If so, you file regardless of size.
• If the return will not be ready in time, file Form 5558 by July 31 to lock in the extension.

If you sponsor any retirement plan and are not sure whether July 31 applies to you, that is exactly what the Gnomon Diagnostic sorts out, from your plan's year-end value and history. Start yours at start.gnomonplan.com.

This is general tax information, not advice for your specific situation. Talk with us or your tax professional before acting on it.