Does plan sponsor need EIN to create a 401k Plan?

I am talking with an attorney who has a practice with no employees, just him.  He has dba business name and he puts all revenue through the dba which he reports as a sole prop on his tax return.  But he does not have an EIN and seem reluctant to create one.  He wants to start a 401k for himself.  Can he do that without an EIN?

Thank you for any comments.

Yes but he is ill advised to do so. An EIN will be necessary when the first 5500-ez must be filed. In addition, most investments will require a taxpayer ID. It is not advisable to use an individual's social security number as the taxpayer ID for a qualified plan investment.

5500EZ instructions, page 4 "Do not enter a...SSN"

Thanks very much.  I appreciate the replies

Questions like these make me want to reverse it to, "Why would you *not* get an EIN???"

Consider also pointing out that not only Form 5500 but also a trustee's, recordkeeper's, and other investment and service providers' systems would treat whatever nine-digit number is furnished as an EIN, and so might expose it more widely than one wants to expose a Social Security Number or Individual Taxpayer Identification Number.

The attorney might explore obtaining an EIN for his plan trust, for example, "401(k) plan trust for [his d/b/a]." I can't say I've done it - my practice does not extend to plans for sole props. But it seems that might do the trick. 

9 minutes ago, Elizabeth G said:

The attorney might explore obtaining an EIN for his plan trust, for example, "401(k) plan trust for [his d/b/a]." I can't say I've done it - my practice does not extend to plans for sole props. But it seems that might do the trick. 

You can (and I think should) do this as well, but that number can't be used to file the 5500.

I'm assuming your client isn't interested in a SEP IRA due to contribution limits or inability to allow plan loans. A SEP IRA would avoid need for new FEIN and 5500s, if SEP IRA is enough for your client's contributions, and he or she is ok with lack of plan loans. 

I can ask a few more questions, but the he seemed set on a 401k.  

These situations seem to follow me around......

Different individual with a slightly different situation.

1. Individual is an Independent Contractor and is paid from the financial firm he works for but not via W-2.
2. He wants to set up his own 401k just for himself but he does not have a "business", let alone a FEIN or Plan ID number.  

Based on the above he would need a FEIN to file 5500s (even though he would be under $250K for quite awhile).  But am I correct that to sponsor a plan, there needs to be a business, even if the sponsor is himself?  John Doe the sole prop can sponsor a plan but John Doe the individual cannot, is that correct?

Thanks

2 hours ago, Santo Gold said:

These situations seem to follow me around......

Different individual with a slightly different situation.

1. Individual is an Independent Contractor and is paid from the financial firm he works for but not via W-2.
2. He wants to set up his own 401k just for himself but he does not have a "business", let alone a FEIN or Plan ID number.  

Based on the above he would need a FEIN to file 5500s (even though he would be under $250K for quite awhile).  But am I correct that to sponsor a plan, there needs to be a business, even if the sponsor is himself?  John Doe the sole prop can sponsor a plan but John Doe the individual cannot, is that correct?

Thanks

If he is "paid from the financial firm he works for" then he is in fact in business and is, presumably, a sole proprietor, whether he has a business name or not.  He should (must) be getting a 1099-Misc from the firm.  John Doe is both an individual and a sole proprietor - part of being a sole prop is that the business is indistinguishable from the individual, at least for liability - and can establish a plan as a sole proprietor.  (But if he wants to have a plan he must get a tax id number, otherwise he does not need one.)

On 1/4/2022 at 1:28 PM, Santo Gold said:

These situations seem to follow me around......

Different individual with a slightly different situation.

1. Individual is an Independent Contractor and is paid from the financial firm he works for but not via W-2.
2. He wants to set up his own 401k just for himself but he does not have a "business", let alone a FEIN or Plan ID number.  

Based on the above he would need a FEIN to file 5500s (even though he would be under $250K for quite awhile).  But am I correct that to sponsor a plan, there needs to be a business, even if the sponsor is himself?  John Doe the sole prop can sponsor a plan but John Doe the individual cannot, is that correct?

Thanks

So, a person can be on a 1099 that is under his SSN.

Now he creates a DBA, gets EIN and sets up 401k plan.

Does he not need 1099 on his DBA name and EIN OR

just the fact that the EIN is tied to his SSN, makes it okay to get 1099 on SSN and still make contribution to 401k plan under DBA/EIN?

Not sure if one needs to add Name/SSN as a control group to 401k plan

1 hour ago, mkaufman said:

So, a person can be on a 1099 that is under his SSN.

Now he creates a DBA, gets EIN and sets up 401k plan.

Does he not need 1099 on his DBA name and EIN OR

just the fact that the EIN is tied to his SSN, makes it okay to get 1099 on SSN and still make contribution to 401k plan under DBA/EIN?

Not sure if one needs to add Name/SSN as a control group to 401k plan

He doesn't need a DBA but if he got one just to have one, that is ok.  DBA = Doing Business As which means it is just a name and not a separate biz.  No control group; it is one company.

5 hours ago, Bird said:

He doesn't need a DBA but if he got one just to have one, that is ok.  DBA = Doing Business As which means it is just a name and not a separate biz.  No control group; it is one company.

thanks.

Another twist, what happens if

401k plan is under S-corp/EIN-1.

Individual has Sole Prop DBA/EIN-2 and this has been added to S-corp plan as "The term “Employer” includes the following Affiliated Employers covered by the Plan:"

Another business pays the individual on a Name/SSN basis.. How to handle this? add Name/SSN to the above as Affiliated Employer or just having a Sole Prop DBA/EIN-2 enough to contribute to same plan?

12 hours ago, mkaufman said:

Another twist, what happens if

401k plan is under S-corp/EIN-1.

Individual has Sole Prop DBA/EIN-2 and this has been added to S-corp plan as "The term “Employer” includes the following Affiliated Employers covered by the Plan:"

Another business pays the individual on a Name/SSN basis.. How to handle this? add Name/SSN to the above as Affiliated Employer or just having a Sole Prop DBA/EIN-2 enough to contribute to same plan?

It might depend on how the individual is reporting those other payments - all on one Schedule C, or two?  If all on one, then no worries, if two, it's probably ok with just EIN-2 being an adopting employer but I might list the sole prop ("Name/SSN") as well just to be sure.

On 1/20/2022 at 6:57 AM, Bird said:

It might depend on how the individual is reporting those other payments - all on one Schedule C, or two?  If all on one, then no worries, if two, it's probably ok with just EIN-2 being an adopting employer but I might list the sole prop ("Name/SSN") as well just to be sure.

S-corp will be done on 1120S

Sole Prop/DBA/EIN and Name/SSN will be combined in one Sch C since they're both the same business code. Sch C has place for ALL of Name/DBA/SSN/EIN.