Simplified Form 5500 Instructions: How to Fill it out Correctly

As an employer who sponsors a retirement plan, you’ll need to complete IRS Form 5500 on an annual basis. That’s not just the case for major employers, either. Even if you’re self-employed and have a solo 401(k), you still have to file this form to avoid penalties or audits.

The good news is that filling out Form 5500 doesn’t have to be overly complicated. Read on for simplified Form 5500 instructions that can help you get started.

What is a 5500 Short Form?

The 5500 short form was developed by the IRS and the Department of Labor. It collects information about employer-sponsored retirement plans like 401(k)s covered by the Employee Retirement Income Security Act (ERISA). Most people and organizations required to file this form must do so by July 31 annually; however, you may be able to request a 10-week extension.

Your completed 5500 form will include information such as:

  • The name of your company
  • Your Employer Identification Number (EIN)
  • Contact information for plan sponsors
  • Number of active participants at the beginning and end of the year
  • Number of former employees who have assets in the plan
  • Plan type

Along with the “standard” Form 5500, there are two simpler alternative forms designed with small businesses in mind. If your company has anywhere from one to 100 employees, you may be able to fill out Form 5500-EZ or Form 5500-SF.

Do All 401(k) Plans Have to File a 5500 Form?

If you have a 401(k) plan through your employer, you won’t need to worry about Form 5500 as it is designed for employers. However, this can change if you have a 401(k) while self-employed or owning a business. Since you are an employer in this scenario, you’ll need to fill out the right 5500 for your situation.

You will likely be responsible for completing Form 5500-EZ, which is intended for solo 401(k)s and other single-participant plans. You are legally required to file this form if your plan includes more than $250,000 in assets.

Who Can Fill Out a 5500 Form?

Are you responsible for a retirement plan under ERISA? If so, you’ll need to fill out one 5500 form or another as part of your tax strategy. That includes both “normal” 401(k) plans and solo 401(k) plans above $250,000.

Other plans covered by these forms include several 403(b) plans and profit-sharing plans.

How to Fill It Out

Filling out any tax form can be intimidating, but you don’t need to worry too much. To complete this document, just follow these simplified Form 5500 instructions.

Put in Your Annual Report Information

The first task you’ll need to finish to complete Form 5500 is entering your Annual Report Identification Information in Part One. As part of this, you’ll report: 

  • The fiscal year covered by your filing
  • The type of plan you have
  • Whether this report is original or amended
  • Whether or not the plan is covered by collective bargaining
  • Any extensions you have received on the deadline for your form

Finish Your Plan Information

In Part Two of Form 5500, you’ll share information about the plan sponsor and any third-party administrators. More specifically, this section covers info on:

  • How many individuals are participating in the plan
  • Contact information and EINs for third-party administrators
  • Benefits included in the plan
  • Additional schedules that need to be filed along with Form 5500

Businesses offering some retirement plans must also complete Part Three on the third page of the form. This section is only required for specific welfare benefit plans, including health, life, and long-term disability plans.

Find and Complete Other Additional Schedules

The schedules you need to complete along with Form 5500 vary based on the plans and benefits you provide to employees (or yourself).

A complete guide to these schedules is available as part of the Department of Labor’s official Form 5500 instructions. Each schedule generally consists of multiple pages and should take a half-hour to several hours to complete.
Sign and Submit the Form

Sign and Submit the Form

With your form and associated schedules complete, it’s time to sign the form and send it off. You can submit Form 5500 online via the EFAST2 system. Before you do so, make sure to collect a signature from any 401(k) companies you are using as a plan administrator.

An Easier Option

The reality is that Form 5500 is just one of many required by the IRS to ensure you remain compliant with your retirement accounts. Keeping track of each form in addition to the other components of your business can quickly get complex. That’s why you may consider working with Retire4One.

Retire4One prepares, signs and submits the 5500 Form on your behalf. There are no additional requirements or actions needed by you to complete this task. We take care of this complicated filing for you! Get in touch today to learn more.