First time filer questions

[Guest polkovnik]

After spending a considerable amount of time searching for an answer to my most pressing question, it occurred to me that most posts are for people beyond where I'm at.

I'm filing the 5500-EZ for the first time, along with a 1099-R. I'm new to both forms, and the instructions are really vague regarding a rather important detail - Employer Identification Number (EIN). Which EIN am I supposed to use?

Here's the situation...

I had a one-participant 401(k) plan from 2004-2007. On Dec 31, 2007, I terminated the plan and did a direct roll-over to an IRA, so I now need to file the 5500-EZ (first and final). The company I went through in setting it up had me obtain an EIN for the retirement trust. I also have an EIN as a sole proprietor.

It seemed logical to use the retirement plan's EIN on the 1099-R, since the payment went from the plan to the new IRA. That what I did (please tell me if that was wrong). The 5500-EZ, however, asks for the name of the plan and plan number (001, in my case)... but it asks for the employer's EIN in box 2b. That's my sole proprietor EIN, correct?

Also, in box 3b, the form asks for the plan administrator's EIN. When I obtained the EIN for the retirement trust, it asked me whether or not I am the administrator/trustee, which I am -- so I answered yes. Does this mean the EIN in box 3b is supposed to be the EIN of the retirement trust?

Sadly, the instructions just blow right by it without going into any detail.

Can someone shed some light?

[Bird]

Yes, the trust number is the right one to use for the 1099-R.

Yes, the employer EIN is your sole prop EIN.

No, don't use the plan/trust # for the administrator number. You (the sole proprietor) are also the administrator so you just write "same" where it asks for the plan administrator name.

[Guest polkovnik]

Thanks!

[Bill Presson]

Wish I had read this thread first thing this morning! These are the kind of questions where I actually know the answers.

Curses, bird, curses!!

[Below Ground]

I must admit Mr. Presson, I too felt oh so smart for once!

[Guest polkovnik]

Many thanks for the earlier answers. I had to set the form aside while I was looking for (and then waiting for a new copy of) the year-end 2006 statement, so I could be certain of the correct beginning balance for line 11a... and now I'm trying to hustle and get the form filed by month-end.

So, if you would please allow me, I've got a couple of outstanding questions. Again, this is my first time filing a 5500(EZ), so I apologize in advance if my questions are too basic. I'm hoping to get it done correctly the first time and avoid the problems so many others have run into.

The return is both a first and final return (because the assets never exceeded the filing threshold), and it's for a one-participant 401(k). Here are my questions:

- Line 2c (Employer's telephone number): I am no longer in business, but this was a sole prop. Do I enter my current personal phone number, my old (now disconnected) number, or leave it blank? Thoughts?

- Line 9 (# of participants @ end of plan year): Since this is a final return (assets were rolled over and plan was terminated on 12/31/07), should 9a/b/c all be 0?

- Line 10 (contributions & distributions): Here are my assumptions & reasoning. Please comment.

- 10b & 10c are both 0 (zero) because I didn't make any "2007" contributions. I did make a "2006" contribution prior to the filing deadline for my 2006 return (Spring 2007), but I added this amount to the year-end 2006 balance on my statement from Schwab and put the combined total on line 11a. Is this correct?

- 10d & 10e are both 0 (zero) because 100% of the ending balance was rolled over (direct transfer) to an IRA.

- 10f shows the full amount of the 12/31/07 rollover. Correct?

- 10g & 10h are both 0 (zero).

- Line 11a (Total plan assets): Beginning of Year = 12/31/06 balance plus "2006" contribution that was funded in 2007 (prior to the filing deadline)... and End of Year = 0 (zero). Correct?

- Line 11b (Total plan liabilities): Both are 0 (zero). I am not aware of any liabilities, but maybe I'm wrong on this.

One final question, if I may... Generally speaking, what sort of recordkeeping am (was) I supposed to be doing as trustee for the plan? I knew from the beginning that I would need to keep records of contributions, and that I might eventually need to file a return if I exceeded a certain balance in the plan... but now I'm beginning to wonder if there's a requirement to keep/do more than that.

Thank you all in advance for your help. The IRS instructions for this form really don't offer much help, so someone with no experience (like me) can get in a lot of trouble quick if they don't get help from people who know what they're doing.

God bless.

Don

[Bird]

After looking over the previous responses, I'm going to give someone else the satisfaction of providing specific answers. I'll just comment that your concern for doing this "right" is admirable, but you could probably answer some of those questions with "cat" and I don't know that anyone would question it.

[Guest polkovnik]

After looking over the previous responses, I'm going to give someone else the satisfaction of providing specific answers. I'll just comment that your concern for doing this "right" is admirable, but you could probably answer some of those questions with "cat" and I don't know that anyone would question it.

What is "cat"? I'm afraid I don't understand the reference. Thanks.

[Bird]

LOL, sorry, I just meant any random answer and used "cat" as something nonsensical.

Since no one answered the questions I will.

Phone # - just use your current number...it's not like they're going to call anyway. Or use the old number if you want to be sure you're not hassled by anyone.

Yes, 0 participants at end of year.

You are correct in all other assumptions except that 10g (amounts rec'd other than contributions) is looking for interest and dividends and realized gains - but not unrealized gains. And 10h would be any expenses, such as account fees, paid by the plan.

If you kept your account statements you did about all the recordkeeping that would be needed. Actually, I shouldn't make too much light of all this, because if you had both employer and employee money in the plan, it could make a difference for certain purposes and you should have kept track of the total account by "source" - i.e. allocated gains or losses separately to the two types of money so you'd be able to say "I have x dollars of employer money and y dollars of employee money" at a given time. And we do keep track of it for our clients and it does, or I should say, it could, make a difference. But if you've terminated the plan, and everything was pre-tax money and you rolled it all into a regular IRA, then it turns out that it didn't make a difference. (I assume you didn't have any Roth money in the plan.)

[Guest polkovnik]

Bird,

Thanks for your response.

Er, umm, eh... what if I didn't keep the statements?

Schwab switched me to "paperless" delivery without asking, so there are several statements I don't have. Last year was brutal, though. I actually ended the year down $3,658 from where I started. So, should the items in line 10 add up to the difference between line 11's "Beginning of Year" and "End of Year" amounts?

If I only show the realized gains & losses, then I don't see how the numbers will tie (if they are supposed to) on the form.

I'm sure I can go back and pull the realized numbers, but do you think it's necessary?

Again, thanks for all your help.

[Bird]

An interesting thing about 5500 reporting is that realized and unrealized gains and losses are calc'd from the beginning of the year, not from purchase date. And generally, on the EZ, since you omit unrealized gains and losses, the beginning and ending numbers do NOT tie out. But in your case, for a final return, I'd consider all gains and losses realized, whether you actually sold securities or not, and in that case, you can be fairly comfortable showing -3,658 in 10g.

Don't worry about the statements. If you have beginning and end of year that's fine for government work. (Just for the record, we have a higher standard for our clients and are somewhat obsessive about reconciling everything to the penny. But it sounds like you are paying way more attention to this than a typical EZ filer [and that includes filings prepared by accountants]; just the fact that you recognize that you have to file a final return even if you never filed one is impressive.)

[Guest polkovnik]

Well, thank you for everything. You've a been a HUGE help, and I hope you realize how much I appreciate your efforts.

I will move forward with your suggestions and get this monkey off my back -- and you'll have THIS monkey off yours.

Take care & God bless!

Don