What is Form 5500?

what is form 5500

An IRS Form 5500 is an annual report filed with the U.S. Department of Labor. It differs from a tax return. Form 5500 is an informational report containing financial information about a 401(k) plan. It serves more than one purpose and provides disclosures for plan participants and beneficiaries.

What Information Does Form 5500 Include?

Basic information captured includes:

  • Plan name
  • Starting date
  • Sponsor information
  • Participant information
  • Administrator details
  • Assets and contributions

What Type Do I Need?

There are several form options when it comes to filing.

  • 5500 – Annual Return/Report of Employee Benefit Plan
  • 5500-SF – Annual Return/Report of Small Employee Benefit Plan
  • 5500-EZ – Annual Return of a One-Participant Retirement Plan or a Foreign Plan

One-participant plans or foreign plans must file Form 5500-EZ. You can file electronically as of January 1, 2021.

Form 5500-EZ

This is the designated form for plans with only one participant. It is also referred to as a Solo 401(k) Plan. A one-participant plan covers a business owner with no employees. But, the plan can cover a business owner and their spouse or business partner. This only applies when the partners and their spouses are the only plan participants. This form is filed when the plan’s asset value is over $250,000 as of December 31 of the previous tax year.

How Is Form 5500-EZ Filed?

Form 5500-EZ is due the last day of the seventh month after the plan year ends, or typically July 31. The IRS provides extensions for those who file a request before July 31. This will avoid any late penalties issued for late filings.

Form 5500-EZ is available on the IRS website. The IRS now also allows you to file electronically through EFAST2. If you are not subject to the IRS e-filing requirements, you may file on paper with the IRS. For complete filing instructions, visit the IRS’s website.

Midland Forms has a designated team who can help you complete the timely filing of your Form 5500-EZ and simplify the process. For more information, don’t hesitate to contact us at (239) 472-0074.

S Corporation vs. C Corporation Basics

s corporation vs c corporation

Incorporation is the most popular way to start a business in the US. More than 70% of new companies choose to register as corporations. Of those, more than three of four corporations elect to incorporate and be taxed as an “S Corporation” instead of a “C Corporation.” Here are some things to know to help decide which type of incorporation may be right for a business.

What is a C Corporation?

C Corporations are a legal business structure that separates the income and assets of the company from that of the owner(s). This structure shields the owners from personal liability for the obligations and debts of the corporation. C Corporations must pay corporate taxes before distributing dividends to shareholders. Shareholders also pay personal income taxes on this distribution.

When incorporating, the company must establish a board of directors and write corporate bylaws. Corporations are also required to hold an annual shareholder’s meeting and keep the meeting’s minutes.

What is an S Corporation?

S Corporations enjoy all the limited liability protections of C Corporations and are subject to the same incorporation requirements. What sets an S Corporation apart from a C Corporation is primarily how profits, losses, deductions, and credits are treated.

S Corporations are “pass-through” entities. This means their shareholders report the stream of income and losses from the corporation on their personal tax returns.

With this structure, shareholders pay tax at their individual income tax rates. Double taxation of income generated from a corporation is avoided. Generally, the S Corporation itself does not pay any income taxes.

S Corporations Must

  • Be owned by US citizen(s)
  • Have no more than 100 shareholders
  • Have only one class of stock

Which Corporation is Right?

S Incorporation may allow for the realization of business gains and losses on a personal tax return. But a C Corporation could benefit an owner’s overall tax burden if they have a higher individual tax rate than the corporate tax rate. Planning for the future and growth of your business is important as well. C Corporations may issue different classes of stock, while S Corporations are limited to only one type of stock offering.

The decision of which type of incorporation to pursue will ultimately depend on the needs of the business and its owner(s). Please consult with your tax advisor when deciding what type of structure is better tailored to you.

When you are ready to file for incorporation, Midland Forms can help simplify the process. We complete the filing for you and even assist with preparing bylaws. For more information, please reach out to us at (239) 472-0074.

Nick Betancourt, Compliance Associate

Written by Nick Betancourt

Compliance Associate

Does My Florida Business Need a Registered Agent?

Florida registered agent

The short answer is, yes. If you own a corporation or LLC in Florida, you must have a registered agent within the state. The Secretary of State will reject your business filing if there isn’t a registered agent appointed.

What is a Registered Agent?

A registered agent (RA) gives the state of Florida a live person to send official state and legal documents to. They are accountable for following all statutory requirements. A RA can be an individual who lives in the state, or, an entity that is authorized to conduct business in Florida. A RA ensures that your business maintains a reliable way of being contacted.

Requirements of a Florida Registered Agent

The RA must accept the appointment in writing. In doing so, they accept responsibility for the obligations of a RA. The RA must keep accurate records according to the Department of State requirements.

Registered agents must remain available during normal business hours to receive legal and important documents. They must maintain a physical address in the registered state and be listed in public records. And, they must promptly forward state correspondence and legal notices to the LLC or corporation.

Failure to follow the above requirements can result in legal and financial liability. RAs should track and notify you when annual reports are due to keep your business entity in compliance with the state of Florida.

What Does a Registered Agent Do for a Business?

Registered agents receive legal proceedings, wage garnishments, subpoenas for records, official state correspondence, and other business requests.

Why Do I Need a Registered Agent?

Because registered agents follow all statutory requirements, they help your business avoid legal fines and headaches.

Your business may follow odd or irregular business hours. In this case, it’s best to choose a third party to act as your RA as they will be available to accept documents during normal business hours.

Maybe your business doesn’t have a physical address. Rather than having to list your home address, you can enlist a third-party RA. That way, the RA’s address will be listed in public records, protecting you from receiving junk and unwanted mail to your home.

Why Can’t an Employee or Manager be the Registered Agent?

Some companies can be their own registered agent by choosing an employee or manager. This is ill-advised due to a few concerns.

Privacy. Your RA’s address must be listed publicly. In most cases, you won’t want your staff’s or manager’s address displayed publicly.

Turnover. If the chosen employee or manager leaves the company, you will have to appoint a new RA immediately. Delays in doing so can cause legal and financial consequences.

Reliability. Registered agents must be available during working hours at the address on file. Since your staff will likely be at your business during working hours, you can’t ensure they will be available to receive documents as needed.

Due to these concerns, we advise that you appoint a third party like Midland Forms to be your business’s registered agent. For more information about Midland Form’s registered agent services, please reach out to us at (239) 472-0074.