These apply to all Solo(k) plan sponsors — whether your client is transitioning from a prototype plan document previously provided by a financial institution or is starting a new plan. As the plan sponsor, your client is responsible for making sure the plan is run correctly. Aboon provides the tools and services to help, but the plan is your client's responsibility.

What it is: An annual informational return for the retirement plan, filed with the IRS.

When it's required: Your client must file Form 5500-EZ when their total Solo(k) plan assets exceed $250,000 at the end of the plan year, or when the plan is being terminated, whichever is earlier.

When it's due: July 31 of the following year (for calendar-year plans), with an extension to October 15 if they file Form 5558.

What happens if they don't file: The IRS assesses penalties for late or missing filings. If your client has missed filings, the IRS offers a late-filing program with reduced penalties. Their tax advisor can provide additional details.

How Aboon helps: Core clients are responsible for preparing and filing Form 5500-EZ on their own. Core Plus clients receive Form 5500-EZ preparation support from Aboon. All clients remain responsible for monitoring the Form 5500-EZ reporting threshold and its timely filing.

What they are (2026):

What happens if a client contributes too much: Excess contributions must be corrected. The correction method and tax consequences depend on the type of excess and when it's corrected. This can result in additional taxes, penalties, and required corrective distributions.

How Aboon helps: Core Plus clients receive contribution calculation support. All clients should work with their tax advisor to determine appropriate contribution amounts based on their specific income, business structure, and objectives.

The rule: A Solo(k) is only for businesses with no W-2 employees other than the owner(s) and their spouse(s). Independent contractors (1099 workers) do not count as employees for purposes of Solo(k).

What happens if your client hires an employee: If your client hires a non-spouse W-2 employee, their plan may no longer qualify as a Solo(k). This triggers new compliance requirements, including annual testing, expanded reporting, and potential plan amendments. Your client must notify Aboon immediately if they plan to hire or have hired an employee.

What your client should NOT do: Clients should not ignore this, abandon the plan, or simply stop contributing. Solo(k) plans require a formal termination process — including a plan amendment, distribution of all assets, and a Form 5500-EZ filing, regardless of how much money was in the plan at the time your client decides to close it.

How Aboon helps: Aboon's plan document includes standard eligibility periods (age 21, one year of service) that provide a built-in buffer for businesses that hire employees. Have your client contact Aboon as soon as their situation changes, and we'll help them figure out their options.

The basics: Your client can generally take money out of their Solo(k) when they stop working, reach age 59½, become disabled, or pass away — at which point it becomes available to their beneficiaries.

Required Minimum Distributions (RMDs): If your client owns more than 5% of the business (which includes most Solo(k) participants), they must begin taking RMDs by April 1 of the year after they turn 73. Failure to take RMDs results in a 25% excise tax on the amount that should have been distributed. This requirement extends to spouses.

Early withdrawal penalties: Distributions before age 59½ are generally subject to a 10% early withdrawal penalty in addition to regular income tax, unless an exception applies.

Tax reporting: All distributions from the plan must be reported to the IRS. Core clients are responsible for tax reporting on thier own. Core Plus clients may receive distributions support through Aboon, with the 1099-R issued after year-end.

Aboon does:

Aboon does not: