Form 5500-EZ

[Lori Foresz]

I am reading the instructions but am still unclear. Is a Form 5500-EZ required for the year if the beginning of year assets are $70k and the end of year assets are $110k?? It seems to be based on prior year end of year assets, so, no for this year, but yes for next year.

Can anyone confirm?

Please let me know.

thanks

[Blinky the 3-eyed Fish]

No, you have to file if assets are greater than $100,000 for the year in question. However, if there is a receivable, you could file on a cash basis. That could keep you under $100,000 for another year.

[Lori Foresz]

Okay. So the rule is that if assets go over $100 during the year, a filing is required. Last year was the first plan year and the plan filed on the accrual basis. If we could act like a cash basis filer this year, it would avoid the filing. I wonder if it is okay to switch from accrual to cash seemingly for the purpose of avoiding a filing. Any thoughts?

Thanks for your input.

[Blinky the 3-eyed Fish]

Okay. So the rule is that if assets go over $100 during the year, a filing is required.

No, they have to be over $100,000 at the END of the year. You could have a situation where assets went above the $100,000 mark during the year and then dipped back down below.

You have to be consistent in your methodology of reporting. Since you filed on an accrual basis last year, you are stuck with that method. You could file an amended return for last year to show it on a cash basis if you think that would help.

But IMHO I recommend filing EZ's for plans even when they are less than $100,000. It allows you to file the Sch P and get that magical statute of limitations running.