How to prepare for Saturday’s Form 5500 filing deadline
With the October 15 deadline for filing Form 5500 fast approaching, tire dealers need to make sure all their paperwork and information requests are in place and on track.
Form 5500 relates to the compulsory reporting of employee benefits.
Here are some important things to make sure you are on top of, according to accounting, tax and business advisory services company Schneider Downs, and some common mistakes the United States Department of Labor says to avoid, to help ensure you get it right and avoid any penalties:
Speak to your service provider
You need to contact your service provider to make sure that any non-discrimination testing has been completed and any corrective actions have been done. You’ll also need to review any year-end reporting prepared by the service provider to check for any discrepancies or significant changes in the accounts.
Check up on timelines
Contact your auditor and Form 5500 preparer if they are separate from your service provider and make sure they are on time to meet the filing deadline. Often, auditors will need to work together with the Form 5500 preparer to ensure the amounts on Form 5500 and reported in financial statements match.
Meet with the plan’s oversight committee
The auditors will present their results to the plan’s oversight committee, which Schneider Downs says is an ideal time to revisit plan provisions and confirm that the plan is operating as intended. Any problems with the plan will be identified in the audit, and there’s the opportunity to put plans in place to fix them.
Common mistakes you should avoid
All filings must be submitted electronically using the EFAST2 processing system. The Department of Labor has a list of common mistakes that are easy to find but will create problems when you are trying to file your Form 5500 online.
Failing to sign the form
Failing to sign the form is the number one reason that filers receive a “Processing-Stopped” error message, according to the Department of Labor. To obtain electronic signature credentials, go to www.efast.dol.gov and register as a signer. You will be provided with a UserID and PIN and you will select a password. Both the UserID and PIN are needed to sign Form 5500.
Make sure your form has the proper EIN and Plan number
The Employer Identification Number (EIN) used to identify the “plan sponsor” must be the same year to year when completing Line 2b. If you switch EINs, without reporting the change on Line 4 of the form, the DOL or IRS will probably contact you.
Enter a valid business code
A valid business code best describes your business. The only business codes that are valid for answering Line 2d are those listed in the Form 5500/5500-SF filing instructions section marked “Codes for Principal Business Activity.” However, business codes may change from year to year, so check before you enter the code.
Validate your filing
Automatic validation checks for errors, like inconsistencies in schedule numbers, before you submit the form to the government. If the errors or warnings are not corrected before submission, the government will be alerted when the form is submitted, so running the validation helps make sure you get it right the first time.
The above advice is general in nature and should not be construed as professional advice. This information should only be used when coordinated with individual professional advice.