401k Audits

401(k) Audit requirements

All employers sponsoring 401k plans must file tax returns with the IRS via an informational return - Form 5500.  The audit requirement is based on whether the plan files this return as a large or small plan - large plans need to include audited financial statements with the tax filing whereas small plans do not.

The number of eligible participants as of the 1st day of the Plan year determines if a plan can file Schedule H (large plan) or Schedule I (small plan) as a supplemental schedule to the Form 5500. 

In the first year of operations, the cutoff for classification is easy – under 100 eligible participants equates to a small plan and plans with 100 participants or more are classified as large plans.  After year one, the 80 - 120 Rule comes into play.   Any plan filing a Schedule H is required to attach an audited financial statement to the annual Form 5500 filing.  Still confused as to whether you have a large or small plan?  Give us a call to discuss.

100% of our business is performing the audit described above.


Tax Due Dates