Solo 401(k) Contribution Limits 2026

When you are self-employed, nobody is matching your 401(k) contributions or auto-enrolling you into a plan. The trade-off is substantial: a Solo 401(k) lets you wear both hats — employee and employer — which pushes your contribution ceiling far above what a regular workplace 401(k) or even a SEP IRA allows. For 2026, that combined ceiling is $72,000 if you are under 50, rising to $80,000 for ages 50–59 and 64+, and reaching $83,250 for the ages 60–63 super catch-up band under SECURE 2.0 (per IRS Notice 2025-67).

Our Solo 401(k) Contribution Calculator works out your exact limit based on your income, age, and business structure. Here is what actually drives that number — and how to use it to maximize every dollar you shelter from federal tax.

Two Contributions, One Combined Cap

A Solo 401(k) has two separate pieces that stack together under a single combined ceiling:

Employee deferral: up to $24,500 for 2026, the same limit that applies to any 401(k) participant, self-employed or not.
Employer profit-sharing contribution: up to 25% of compensation, contributed by "your business" on your behalf.

Combined, the overall 2026 limit under IRS Publication 560 and IRS Notice 2025-67 is $72,000 for anyone under 50. Add catch-up contributions and it climbs to $80,000 for those aged 50–59 or 64 and older, and to $83,250 for the 60–63 age band — a four-year window that gets the larger "super catch-up" of $11,250 instead of the standard $8,000. The compensation cap for the employer contribution calculation is $360,000 for 2026.

The Math Depends on How Your Business Is Structured

This is where most online calculators get sloppy, and it is worth getting right because the difference is not small.

If you are a sole proprietor or single-member LLC

You do not simply take 25% of your net income. The effective rate is roughly 20% of your net self-employment earnings after deducting half of self-employment tax. IRS Publication 560 confirms this algebraically: a stated plan rate of 25% converts to an effective self-employed rate of 20% (0.25 / 1.25 = 0.20). This is not a simplification — it is the exact formula required by the IRS for self-employed persons.

Worked example — Elena, sole proprietor, age 42, net self-employment income $150,000:

Self-employment tax: $150,000 x 0.9235 x 15.3% = approx. $21,226
Half SE-tax deduction: $10,613
Adjusted net earnings: $150,000 - $10,613 = $139,387
Maximum employer contribution (20% of $139,387): $27,877
Employee deferral: $24,500
Total Solo 401(k) contribution: $52,377 — well inside the $72,000 cap

If you run an S-corporation and pay yourself W-2 wages

The math is more straightforward: the employer contribution is a flat 25% of your W-2 wages — no conversion factor needed, because the S-corp already pays payroll taxes on your salary separately. If your S-corp pays you $150,000 in W-2 wages, your employer contribution can be up to $37,500. Add the $24,500 employee deferral for a total of $62,000 — notably higher than the sole-proprietor version on the same gross income.

Why the S-corp often wins on retirement contributions: At $150,000 of W-2 wages, the S-corp owner reaches $62,000 total vs. the sole proprietor's $52,377 on the same gross income — a $9,623 difference per year. At a 24% marginal rate, that is roughly $2,310 more in immediate federal tax savings annually.

Catch-Up Contributions and the New SECURE 2.0 Mandatory-Roth Rule

Catch-up contributions sit in a separate bucket from the $72,000 combined limit — they are pure additional room:

Age 50–59 or 64+: an extra $8,000, bringing your possible total to $80,000.
Age 60–63 (SECURE 2.0 super catch-up): a larger $11,250, bringing your possible total to $83,250. This replaces the standard $8,000 for these four ages specifically — it does not stack on top of it.

New mandatory-Roth catch-up rule for 2026: Under SECURE 2.0, if you had FICA wages above $150,000 in the prior calendar year, your 2026 catch-up contributions must be designated as Roth (after-tax) rather than pre-tax. Most genuine sole proprietors who pay no FICA wages to themselves are unaffected. S-corp owners paying W-2 wages above $150,000 need to plan accordingly — their catch-up dollars will be after-tax, which may actually be beneficial if they expect higher tax rates in retirement.

Doubling Your Household Limit With a Participating Spouse

If your spouse earns eligible compensation from the same business as a genuine employee or documented co-owner, each spouse gets their own independent Solo 401(k) limit. The limits do not share a pool.

Worked example — Marcus and Priya, married consulting firm (LLC): Marcus, 48, earns $180,000 net profit from the business. Priya, 46, earns $60,000 in genuine compensation for her real role managing client projects.

Marcus: employee deferral $24,500 + employer 20% of ~$166,000 adjusted earnings ($33,200) = $57,700
Priya: employee deferral $24,500 + employer 20% of ~$55,350 adjusted earnings ($11,070) = $35,570
Combined household Solo 401(k) contributions: $93,270 for 2026

The same income run through two SEP IRAs would yield roughly $33,200 + $11,070 = $44,270 combined — $49,000 less annually. For a couple in the 24% bracket, that $49,000 difference means over $11,760 in additional federal income tax avoided each year.

Solo 401(k) vs. SEP IRA vs. SIMPLE IRA: Full Comparison

Feature	Solo 401(k)	SEP IRA	SIMPLE IRA
2026 employee deferral	$24,500 + catch-up	None	$16,500 (+ $3,500 catch-up)
2026 combined max	$72,000 / $83,250 (60-63)	$72,000 (employer only)	~$20,000 total
Roth option	Yes (employee portion)	No	Yes (if plan allows)
Mega backdoor Roth	Yes (if plan allows)	No	No
Loan provision	Yes (50% / $50k max)	No	No
Annual IRS filing	Form 5500-EZ if >$250k	None required	None required
Eligible for employees?	No (owner + spouse only)	Yes	Yes (up to 100 employees)
Best for	Solopreneurs maximizing savings	High earners wanting simplicity	Small businesses with employees

How to Actually Open a Solo 401(k) in 2026: Step-by-Step

Get an EIN for the plan trust: Your Solo 401(k) operates as a trust that needs its own Employer Identification Number, separate from your business EIN. Most major brokerages handle this in their account-opening flow. For self-directed plans, apply free at IRS.gov (about 10 minutes online).
Choose a provider: Three categories: (a) Free prototype plans at major brokerages — Fidelity, Schwab (low cost, broad investment options, limited plan document flexibility); (b) Self-directed custodians like Equity Trust or Alto (higher fees, allows real estate and alternative investments); (c) Third-party administrators — most flexible, required for mega backdoor Roth. For most solopreneurs, Fidelity or Schwab is the right starting point.
Sign the Plan Adoption Agreement by December 31: The legal document establishing the plan must be executed by December 31 of the tax year you want to contribute for. This is a hard deadline — no exceptions, no retroactive establishment.
Make your employee deferral election in writing before year-end: A formal written election for your contribution amount — usually a one-page form or an online election with your provider.
Fund the employee deferral by December 31: Transfer the elected amount into the plan account before year-end.
Calculate and fund the employer contribution by the tax deadline: Sole proprietors can fund the employer side until October 15 of the following year (with extension). Use the calculator above to find your exact maximum after you know your final net income.
File Form 5500-EZ once assets exceed $250,000: Due July 31 annually. Below $250,000, no filing is required.

Roth vs. Traditional Solo 401(k): Which Sub-Account Wins?

Most providers now offer both Traditional (pre-tax) and Roth sub-accounts for the employee deferral portion. The employer contribution is always pre-tax regardless.

Choose Traditional (pre-tax) if: you are in a high bracket now (32%+), you expect lower income in retirement, or you need the current-year deduction to manage AGI thresholds (QBI deduction, ACA subsidy cliff).
Choose Roth if: you are early in your career with temporarily lower income, you expect higher tax rates in retirement, or you want tax-free growth that avoids future required minimum distributions (RMDs).
No Roth income limits: Unlike the Roth IRA (which phases out above $236,000 for married filers in 2026), the Solo 401(k) Roth deferral has no income limit — making it especially valuable for high earners who are Roth IRA-ineligible.
Mandatory Roth catch-up for high-FICA earners: Under SECURE 2.0, if you had FICA wages above $150,000 in 2025, your 2026 catch-up contributions must be Roth. Most sole proprietors are unaffected; S-corp owners earning above the threshold should plan accordingly.

Common Mistakes That Trigger Excess Contributions

Applying 25% directly to gross self-employment income instead of net earnings after the SE-tax deduction — overstates your allowed employer contribution and can trigger a 6% annual excise tax on the excess.
Forgetting the 100%-of-compensation ceiling. All contributions combined cannot exceed 100% of your net earned income — this mainly catches lower-income self-employed workers who try to maximize the employee deferral alone.
Missing the December 31 employee deferral election deadline by treating it the same as the later employer contribution deadline.
Not accounting for a W-2 job 401(k). The $24,500 employee deferral limit applies across all 401(k) plans combined in the same year — not per plan. Contributing $15,000 to your day-job plan leaves only $9,500 for the Solo 401(k) employee deferral.
For S-corp owners: contributing based on distributions rather than W-2 wages. Only W-2 wages — not S-corp profit distributions — count as compensation for employer contribution purposes.

If you are comparing self-employed retirement options, our Freelancer Tax Estimator and Self-Employment Tax Calculator are useful companion tools, since your net self-employment income is the critical input for the employer contribution calculation.

Editorial Review and Authorship

This article was researched and written by the SmartCalcLabs financial content team and independently reviewed for accuracy against primary IRS sources. All contribution limits are cross-referenced with IRS Notice 2025-67 (2026 cost-of-living adjustments for retirement plans), IRS Publication 560 (Retirement Plans for Small Business, 2026 edition), and IRS Rev. Proc. 2025-18 (SECURE 2.0 super catch-up rules). The 2026 Social Security wage base of $176,100 per SSA.gov is reflected in self-employment tax calculations throughout. This page is reviewed and updated annually when the IRS releases updated limits, typically each October. Last reviewed: September 26, 2026.

Disclaimer: The content on SmartCalcLabs is for educational and informational purposes only and does not constitute tax or financial advice. Contribution limits referenced here reflect 2026 IRS figures under SECURE 2.0 and are subject to annual cost-of-living adjustments. Always confirm your exact limits with a licensed tax professional, particularly around the self-employment tax conversion and S-corp compensation rules.

Frequently Asked Questions

What is the Solo 401(k) contribution deadline for 2026?

Two deadlines apply. First, the Solo 401(k) plan must be legally established — plan adoption agreement signed — by December 31, 2026. You cannot open the plan retroactively in 2027 for 2026 income; this is a hard cutoff. Second, the employee elective deferral must be formally elected in writing and funded by December 31, 2026. The employer profit-sharing contribution has more flexibility: sole proprietors filing Schedule C can fund this side as late as October 15, 2027 (with extension). This means you can wait until you know your final net self-employment income before committing the exact employer contribution amount. Mark both calendar dates — the December 31 plan establishment and employee deferral deadline is the hard constraint that eliminates an entire year's opportunity if missed.

Can I do a mega backdoor Roth with a Solo 401(k)?

Yes — and the Solo 401(k) is one of the best vehicles for this strategy because you control the plan document. The mega backdoor Roth works by making after-tax (non-Roth) employee contributions beyond the standard $24,500 deferral, up to the $72,000 combined annual cap, then immediately converting those after-tax dollars to a Roth sub-account via an in-plan Roth conversion. This allows far more money into tax-free growth than the standard Roth IRA limit ($7,000 in 2026). For example, a sole proprietor with $200,000 net income could contribute $24,500 (pre-tax employee deferral) + approximately $36,000 (employer contribution) = $60,500, leaving up to $11,500 of potential after-tax employee contributions before hitting the $72,000 cap — all convertible to Roth. The critical requirement: your plan document must explicitly permit after-tax contributions and in-service withdrawals or in-plan Roth conversions. Fidelity's self-employed 401(k) supports this; Vanguard's prototype plan does not. Verify with your specific provider.

How much can I contribute to a Solo 401(k) if I only made $30,000?

On $30,000 net self-employment income in 2026, here is the detailed calculation for a sole proprietor under 50: SE tax = approximately $4,239 (15.3% x $30,000 x 0.9235); half SE-tax deduction = $2,120; adjusted net earnings = $27,880; employer contribution at 20% = $5,576; employee deferral up to $24,500 but total contributions cannot exceed 100% of net compensation (~$27,880). In practice, your maximum total contribution is approximately $27,880 — nearly your entire net profit sheltered from federal income tax. Compare this to a SEP IRA on the same income, which caps you at roughly $5,576 employer-only. This is exactly why the Solo 401(k) outperforms a SEP IRA so dramatically at lower income levels: the flat $24,500 employee deferral provides the vast majority of contribution room regardless of income.

Is a Solo 401(k) better than a SEP IRA for an S-corp owner?

For virtually every S-corp owner, yes. Both plans allow employer contributions at 25% of W-2 wages — tied on that metric. But the Solo 401(k) adds an employee deferral of up to $24,500, which the SEP IRA completely lacks. An S-corp owner paying themselves a $100,000 W-2 salary can contribute $25,000 (employer, 25%) + $24,500 (employee deferral) = $49,500 to a Solo 401(k), versus only $25,000 to a SEP IRA — nearly double. At a 24% marginal rate, the extra $24,500 saves $5,880 in federal income tax per year. The Solo 401(k) also provides Roth deferral, loan provisions, and mega backdoor Roth eligibility. The main cost is minimal: Form 5500-EZ once assets exceed $250,000 (a one-page annual filing). For the contribution room gained, this administrative step is almost always worthwhile.

Can my spouse also contribute to my Solo 401(k)?

Yes — and this is one of the most powerful and underused features of the Solo 401(k). If your spouse earns genuine compensation from your business as a documented employee or co-owner, they receive their own independent Solo 401(k) contribution limit — completely separate from yours. The limits do not merge. For 2026, two spouses both under 50 could each contribute up to $72,000, for a combined household maximum of $144,000. Both aged 50-59: up to $160,000 combined. Both aged 60-63: up to $166,500 combined. Requirements: the spouse must perform genuine, documentable work for the business; their compensation must be reasonable relative to that work; payroll records and either a W-2 or guaranteed payments must support it; and the plan documents must explicitly allow spouse-employee participation. At a 22% tax rate, sheltering $144,000 vs. $72,000 creates more than $15,840 in additional immediate federal tax savings per year.

Can I open a Solo 401(k) if I have employees other than my spouse?

Generally no. Solo 401(k) plans are designed for owner-only businesses, with a spouse as the sole exception. If you hire any eligible employee who works more than 1,000 hours per year and meets the plan's age and service requirements, the Solo 401(k) must be converted to a standard 401(k) plan covering those employees — significantly increasing cost and administrative complexity. If you anticipate hiring beyond a spouse, plan for this transition so you are not caught off-guard.

Do I have to contribute the maximum every year?

No. There is no minimum contribution requirement. You can contribute nothing in a lean year and the full maximum in a good year, as long as you stay within that year's limit based on actual net earnings. This flexibility is one of the key advantages of a Solo 401(k) over a SIMPLE IRA, which has mandatory employer contribution formulas once you elect to participate.

What happens if I accidentally over-contribute?

Excess contributions must be withdrawn along with any earnings on them, generally before your tax filing deadline including extensions. If withdrawn in time, the excess is taxable as ordinary income but avoids the additional 10% early withdrawal penalty. If the excess remains in the plan past the deadline, a 6% excise tax applies each year until corrected. Handle this promptly with the help of a tax professional to avoid cascading annual penalties.

👤

[Author Name, CPA / CFP® — fill in before publishing]

[Brief credentials: e.g., "Certified Public Accountant with 12 years of experience in self-employed retirement planning. Member of AICPA."]

Reviewed for accuracy: October 29, 2026 · Tax year: 2026 · Sources: IRS Notice 2025-67, IRS Pub 560

Editorial policy: We update this post and the linked calculator immediately upon each IRS announcement. All numbers are sourced directly from official IRS publications — no projections are presented as fact.

⚡ Quick Answer: 2026 Solo 401(k) Contribution Limits

The table below is the fastest way to find your 2026 maximum Solo 401(k) contribution. Jump to any section using the table of contents, or use the free calculator above to enter your exact numbers.

Contribution Type	2026 Limit	2025 Limit	Change
Employee elective deferral (§402(g))	$24,500	$23,500	+$1,000
Catch-up age 50–59 & 64+	$8,000	$7,500	+$500
Super catch-up ages 60–63 (SECURE 2.0 §109)	$11,250	$11,250	Unchanged
Annual additions cap (§415(c)), excl. catch-ups	$72,000	$70,000	+$2,000
Max total, age under 50	$72,000	$70,000	+$2,000
Max total, age 50–59 or 64+	$80,000	$77,500	+$2,500
Max total, age 60–63	$83,250	$81,250	+$2,000
Compensation cap (§401(a)(17))	$360,000	$350,000	+$10,000

Source: IRS Notice 2025-67 & IRS IR-2025-111 (announced November 13, 2025).

Solo 401(k) = Individual 401(k) = i401k = Solo-k = Uni-K = One-Participant 401(k)

Every name above refers to the same IRS plan. The official IRS term is the one-participant 401(k) plan. It is a standard 401(k) available to any business owner — sole proprietor, single-member LLC, S-corp, or C-corp — who has no common-law employees other than a spouse. Financial institutions use different marketing names:

Fidelity: Self-Employed 401(k) / SE 401(k)
Vanguard: Individual 401(k)
Charles Schwab: Personal 401(k) / Individual 401(k)
TD Ameritrade / Schwab: Solo 401(k)
Fidelity brochures: also "Uni-K"

The IRS rules — contribution limits, deadlines, employer contribution formulas, and filing requirements — are identical regardless of what your brokerage calls it. If you searched for solo k contribution limits, individual 401k calculator, i401k contribution calculator, uni-401k limits, or self employed 401k contribution limits, this is the page you need.

📊 Step-by-Step Worked Examples (2026, Illustrative)

All numbers rounded to the nearest dollar. These are illustrative examples — consult a CPA for your specific situation.

Example 1 — Sole Proprietor, Age 42, $80,000 Net Profit

SE tax: 15.3% × $80,000 = $12,240
½ SE tax deduction: $12,240 ÷ 2 = $6,120
Adjusted net earnings: $80,000 − $6,120 = $73,880
Employer contribution (20% × $73,880) = $14,776
Employee deferral: $24,500 (base limit)
Total: $24,500 + $14,776 = $39,276 ✓ (well under $72,000 cap)
SEP IRA on same income: $14,776 (employer-only — no deferral)
Solo 401(k) advantage: +$24,500

Example 2 — S-Corp Owner, Age 44, $120,000 W-2 Salary

Employer contribution (25% × $120,000) = $30,000
Employee deferral (base): $24,500
Total: $30,000 + $24,500 = $54,500 ✓ (under $72,000 cap)
Federal tax savings at 24%: $54,500 × 0.24 ≈ $13,080

Employer contribution is a business deduction on the S-corp return; employee deferral reduces personal W-2 income. Neither reduces FICA (Social Security / Medicare) wages.

Example 3 — Sole Proprietor, Age 52, $100,000 Net Profit (Standard Catch-Up)

½ SE tax deduction ≈ $7,065; adjusted net = $92,935
Employer (20% × $92,935) = $18,587
Employee deferral base: $24,500
Age 50–59 catch-up: +$8,000
Total: $24,500 + $8,000 + $18,587 = $51,087 ✓ (under $80,000 catch-up cap)

Example 4 — Sole Proprietor, Age 61, $150,000 Net Profit (SECURE 2.0 Super Catch-Up)

½ SE tax deduction ≈ $10,597; adjusted net = $139,403
Employer (20% × $139,403) = $27,881
Employee deferral base: $24,500
Ages 60–63 SECURE 2.0 super catch-up (§109): +$11,250
Subtotal: $24,500 + $11,250 + $27,881 = $63,631
Maximum total for age 60–63: $83,250 — contribution is $63,631 ✓
Plan document must explicitly allow the super catch-up. Confirm with your provider.

Example 5 — Side Business + Day-Job 401(k), Age 38

Full-time employee who already contributed $15,000 to their employer's 401(k); also runs a freelance consulting business with $60,000 net profit.

§402(g) total deferral limit: $24,500 (shared across ALL 401k/403b plans)
Already used at day-job plan: $15,000
Remaining Solo 401(k) employee deferral room: $24,500 − $15,000 = $9,500
½ SE tax on $60,000 ≈ $4,239; adjusted net = $55,761
Employer (20% × $55,761) = $11,152 — this side is NOT shared, fully allowed
Total Solo 401(k) contribution: $9,500 + $11,152 = $20,652

Key insight: the employer profit-sharing contribution from the self-employment business is completely independent of the day-job plan. Only the employee deferral limit is shared.

📅 Solo 401(k) Contribution Deadlines — Tax Year 2026

Action	Deadline	Notes
Employee deferral election (written)	Dec 31, 2026	Must be a written election before year-end. Cannot be made retroactively.
New plan adoption (existing businesses)	Dec 31, 2026	Plan documents must be signed by Dec 31, 2026. SECURE 1.0 rule.
Employer profit-sharing contribution	Tax return due date incl. extensions	Oct 15, 2027 (sole props, Schedule C); Sept 15, 2027 (S-corps with extension).
SECURE 2.0 §317 — new sole prop plan (first year only)	Apr 15, 2027 (NO extension)	Employee deferrals allowed until the unextended due date for the first plan year only. S-corps NOT eligible.
Form 5500-EZ (assets > $250,000 at Dec 31)	July 31, 2027	Extendable with Form 5558. Also required on plan termination regardless of asset level.

📌 The SECURE 2.0 §317 Rule — Commonly Misunderstood

Before SECURE 2.0, sole proprietors had to establish a new Solo 401(k) plan by December 31 to make any contributions for that year — including employee deferrals. Section 317 changed this for unincorporated businesses.

What §317 allows: A sole proprietor or single-member LLC owner who did not have a Solo 401(k) in 2026 can adopt a brand-new plan after December 31, 2026 — but no later than the unextended tax return due date (typically April 15, 2027) — and still make employee elective deferrals for the 2026 plan year.

Critical limits: (1) This applies only to the first plan year — in year two and beyond, the normal Dec 31 establishment deadline applies. (2) S-corps and C-corps are NOT eligible for this exception. (3) The post-year-end adoption deadline is the unextended due date — filing extensions do not extend this window.

🔄 Roth Solo 401(k): Complete 2026 Guide

A Roth Solo 401(k) allows you to designate your employee deferrals as after-tax Roth contributions. The money grows tax-free, and qualified distributions in retirement are completely tax-free — a powerful advantage if you expect your tax rate to be higher in retirement.

Key Roth Facts for 2026

Roth and traditional deferrals share the same $24,500 §402(g) limit — choosing Roth does not give you extra room.
Employer profit-sharing contributions are always pre-tax. There is no Roth employer contribution in a standard Solo 401(k).
Your plan document must explicitly allow Roth deferrals — not all providers offer this. Fidelity and Schwab generally do; Vanguard's prototype plan does not as of this writing.
Roth accounts inside a 401(k) are subject to RMDs starting at age 73 under current law — unlike a Roth IRA, which has no RMD requirement. Rolling Roth 401(k) money to a Roth IRA before age 73 eliminates this issue.
Roth contributions can be combined with the Mega Backdoor Roth strategy if your plan allows after-tax contributions and in-service conversions.

⚠️ Mandatory Roth Catch-Up Rule — Effective January 1, 2026 (SECURE 2.0 §603)

Under SECURE 2.0 §603, if your prior-year FICA wages from the plan sponsor exceeded $145,000 (indexed; for 2026 the applicable threshold based on 2025 wages is $150,000), ALL catch-up contributions must be designated Roth. You cannot make pre-tax catch-up contributions.

Owner Type	Subject to Mandatory Roth Catch-Up?	Why
S-corp owner, 2025 W-2 wages > $150,000, age 50+	YES — all catch-ups must be Roth	W-2/FICA wages exceeded threshold
S-corp owner, 2025 W-2 wages ≤ $150,000, age 50+	No — may choose pre-tax or Roth	Below threshold
Sole proprietor / SMLLC (no W-2)	NOT subject to this rule	No FICA wages — rule does not apply
Partner in partnership	NOT subject to this rule	No W-2/FICA wages

Source: SECURE 2.0 Act §603; IRS final regulations (effective Jan 1, 2026). The transition period was not extended beyond December 31, 2025. Confirm with your provider that your plan document is updated to support this requirement before making 2026 catch-up contributions.

⚖️ Solo 401(k) vs SEP IRA vs SIMPLE IRA — 2026 Numbers

Use this table to decide which plan is right for your situation.

Feature	Solo 401(k)	SEP IRA	SIMPLE IRA
2026 max contribution	$72,000 (+ $8k / $11.25k catch-up)	$72,000 (employer-only)	$17,000 (+ $3,500 catch-up 50+)
Employee deferral	✓ Yes — $24,500	✗ No	✓ Yes — $17,000
Catch-up contributions	✓ $8,000 (50+); $11,250 (60–63)	✗ None	$3,500 (age 50+)
Roth option	✓ Yes (if plan allows)	✗ No	Some providers
Plan loans allowed	✓ Up to 50% / $50,000	✗ No	✗ No
Annual IRS filing	Form 5500-EZ if assets > $250k	✓ None required	✓ None required
Eligible employees	Owner + spouse only	✓ Any employees	✓ Any employees
Who wins at low income (<$50k)?	✓ Solo 401(k) — by a wide margin	Far smaller (employer-only)	Moderate
Setup / administration	Moderate (plan document required)	✓ Very simple	Moderate

When SEP IRA wins: if you have employees (other than a spouse), a SEP IRA can cover them; a Solo 401(k) cannot. At very high incomes (roughly >$288,000 for sole props), both plans hit the same $72,000 cap — at that point the SEP IRA's administrative simplicity may outweigh the Solo 401(k)'s extra features.

✅ Who Is Eligible for a Solo 401(k)?

The defining eligibility rule for a one-participant 401(k) plan is that the business must have no common-law employees other than the owner(s) and their spouse(s). "Common-law employee" is a legal term — it means a worker you control in how and when they work, as opposed to an independent contractor you hire for a result.

✓ Eligible

Sole proprietors (Schedule C filers)
Single-member LLC owners (treated as sole props)
S-corp or C-corp owners with W-2 salary
Partners in a partnership with SE income
Spouses with documented compensation from the business
Full-time employees with a separate self-employment side business

✗ Not Eligible

Businesses with common-law employees (non-spouse) who meet plan eligibility requirements
Individuals with no self-employment income or earned income
Passive investors with no earned compensation

If you hire eligible employees, you generally must convert to a standard 401(k) plan — contact your provider immediately.

Spouse Rule (One of the Best Features)

A spouse who earns genuine compensation from the business — whether as a W-2 employee, as a co-owner of a partnership or LLC, or via guaranteed payments — qualifies for their own independent Solo 401(k) deferral and employer contribution limits. For 2026, two working spouses in the same business can reach a combined household Solo 401(k) total of $144,000 (both under 50), $160,000 (both 50–59), or $166,500 (both 60–63). The spouse's compensation must be documented with payroll records and must reflect actual services performed.

🚫 6 Common Solo 401(k) Mistakes That Cost Real Money

Missing the December 31 employee deferral election deadline

You cannot retroactively elect a salary deferral after December 31. If you miss it, you lose the entire $24,500 employee deferral for that year. The employer profit-sharing contribution has a later deadline — the deferral does not. Set a calendar reminder for early December to review and sign your deferral election.

Ignoring the shared §402(g) limit with a day-job 401(k)

The $24,500 employee deferral limit is shared across every 401(k) and 403(b) plan you participate in during the year. Over-contributing triggers a 6% excise tax. Use our calculator's "day-job deferrals" field to stay within the limit if you contribute to both plans.

Forgetting Form 5500-EZ when assets cross $250,000

Once your Solo 401(k) plan assets exceed $250,000 at December 31, you must file Form 5500-EZ by July 31 of the following year. Missing this filing can result in IRS penalties of up to $250/day (up to $150,000 per return). Most major providers do not help with this filing — you need a CPA or specialist once you approach the threshold.

Miscalculating the 20% sole proprietor employer rate

The formula is 20% × (net profit − ½ SE tax), not 20% × gross net profit. Forgetting the SE tax adjustment overstates the allowable employer contribution and can create an excess contribution. Use IRS Publication 560, Worksheet 1 for the exact calculation, or use our calculator which applies the correct formula.

S-corp owners applying 25% to net income instead of W-2 wages

The S-corp employer contribution is 25% of W-2 wages paid by the corporation — not 25% of the S-corp's total net income, and not 25% of S-corp distributions. Distributions above the W-2 salary do not count as compensation for this purpose. Over-contributing based on total income creates an excess contribution problem.

Not verifying plan document support for Roth or super catch-up

Both Roth deferrals and the ages 60–63 super catch-up are optional plan features — your provider's prototype plan document must explicitly allow them. Before contributing under either provision, call your provider and confirm the plan document supports it. If it does not, you may need to use a different provider or a custom plan document.

🏦 Solo 401(k) Providers — What to Verify

Several major brokerages offer free Solo 401(k) prototype plan documents at no cost. Fees for investments, account maintenance, and trading vary. The most important factors beyond cost are whether the plan document supports the features you need.

Provider	Plan Cost	Roth Deferrals	Super Catch-Up (60–63)	5500-EZ Assistance
Fidelity	Free plan docs	✓ Generally yes — verify directly	Verify with provider	Not provided
Charles Schwab	Free plan docs	✓ Generally yes — verify directly	Verify with provider	Not provided
Vanguard	Free plan docs	✗ Not available in prototype plan	✗ Not available	Not provided
Self-directed custodians	Setup fees vary	Varies by plan doc	Varies by plan doc	Some offer assistance

Provider features and plan documents change. Always verify Roth availability, super catch-up support, and Form 5500-EZ assistance directly with your specific provider before adopting a plan or contributing under any provision. The above is for general reference only.

🔮 2027 Solo 401(k) Limits — Outlook

The IRS typically announces the following year's retirement plan contribution limits in late October or mid-November. As of October 29, 2026, the 2027 limits have not yet been officially announced.

Various analyst projections suggest the §402(g) employee deferral limit could rise to approximately $25,500 and the §415(c) cap to approximately $74,000, but these are estimates only — not official IRS figures. Do not rely on projected 2027 limits for retirement plan contributions or tax planning.

This page and the linked calculator will be updated immediately upon the IRS official announcement. All limits are stored in a single config file for a one-location update — frontend/src/calculators/solo401kLimits.js.

❓ Frequently Asked Questions — Solo 401(k) 2026

Q1. What is the maximum Solo 401(k) contribution for 2026?

The maximum total Solo 401(k) contribution for 2026 is $72,000 (§415(c) annual additions cap, excluding catch-ups), up from $70,000 in 2025. If you are age 50–59 or 64+, add an $8,000 catch-up for a $80,000 total. If you are age 60–63, the SECURE 2.0 super catch-up is $11,250, for a $83,250 maximum. These limits assume your compensation reaches the applicable cap; lower earners are further limited to 100% of compensation. Source: IRS Notice 2025-67.

Q2. What is the Solo 401(k) contribution deadline for 2026?

Two separate deadlines apply. (1) Employee deferral election: must be made in writing by December 31, 2026 — this cannot be done retroactively. (2) Employer profit-sharing: can be made as late as the business's tax return due date including extensions — typically October 15, 2027 for sole proprietors (Schedule C). New plan adoption is generally required by December 31, 2026 (SECURE 1.0), with a post-year-end exception for sole proprietors adopting a plan for the first time (SECURE 2.0 §317, up to the unextended April 15, 2027 deadline).

Q3. How is the Solo 401(k) contribution calculated for a sole proprietor?

Follow IRS Publication 560, Worksheet 1: (1) Calculate self-employment tax: SE tax = net profit × 15.3%. (2) Deduct half of SE tax: ½ SE tax = SE tax ÷ 2. (3) Adjusted net earnings = net profit − ½ SE tax, capped at $360,000. (4) Employer contribution = 20% × adjusted net earnings. (5) Add employee deferral (up to $24,500, or $32,500 / $35,750 with catch-up). (6) Total cannot exceed the §415(c) cap ($72,000 base, plus applicable catch-up). Use our free calculator to apply this formula automatically.

Q4. Can I open a Solo 401(k) if I have a day job with a 401(k)?

Yes — as long as you have self-employment income from a side business. The $24,500 §402(g) employee deferral limit is shared across all 401(k) and 403(b) plans. If you already contributed $15,000 at your employer's plan, you can only defer $9,500 more into your Solo 401(k). However, the employer profit-sharing contribution from your self-employment business is a completely separate calculation — your day-job employer is a different entity, so your Solo 401(k) employer side is not reduced.

Q5. What is the Solo 401(k) employer contribution for an S-corp owner?

For an S-corp owner, the employer profit-sharing contribution is 25% of W-2 wages paid by the corporation (not 25% of distributions or total S-corp net income). The compensation cap in 2026 is $360,000. So the maximum employer contribution is 25% × $360,000 = $90,000, but this is further limited to the §415(c) cap of $72,000. In practice, to reach the $72,000 employer-only limit you would need a W-2 salary of $288,000 (25% × $288,000 = $72,000). On top of this, add the $24,500 employee deferral.

Q6. What is the Roth Solo 401(k) catch-up rule for 2026?

Under SECURE 2.0 §603, effective January 1, 2026, if your prior-year FICA wages from the plan sponsor exceeded $150,000 (based on 2025 wages), all catch-up contributions must be made as Roth (after-tax). This rule affects S-corp owners who pay themselves a W-2 salary above that threshold. Sole proprietors and partners have no FICA wages and are not subject to this rule. If you are an S-corp owner above the threshold, confirm your plan document supports Roth catch-up contributions.

Q7. Can my spouse contribute to my Solo 401(k)?

Yes. A spouse who earns genuine compensation from your business — as a W-2 employee, co-owner, or via guaranteed payments — qualifies for their own independent Solo 401(k) contribution limits. The limits are not pooled. For 2026: both spouses under 50 = $144,000 household combined; both 50–59 = $160,000; both 60–63 = $166,500. The spouse's compensation must be documented with payroll records and reflect actual services. The plan document must allow spouse-employee participation.

Q8. What is the difference between a Solo 401(k) and a SEP IRA?

The key difference is the employee deferral. A SEP IRA allows only employer-style contributions (effectively ~20% of net earnings for sole proprietors or 25% of W-2 for S-corps) — no employee deferral, no catch-up, and no Roth option. A Solo 401(k) adds up to $24,500 employee deferral on top of the same employer contribution. This makes the Solo 401(k) dramatically better at lower and mid incomes. At very high incomes (roughly $288k+ for sole props), both plans hit the same $72,000 §415(c) cap and the employer contribution alone fills it.

Q9. Does a Solo 401(k) require Form 5500-EZ?

Form 5500-EZ is required when your Solo 401(k) plan assets exceed $250,000 at December 31 of any plan year, and also when the plan is terminated (regardless of asset level). The form is due July 31 of the following year and can be extended with Form 5558. Missing the filing can trigger penalties of up to $250/day. Most major providers (Fidelity, Vanguard, Schwab) do not assist with Form 5500-EZ — you need a CPA or a filing specialist. See the Form 5500-EZ instructions.

Q10. What is the SECURE 2.0 super catch-up for ages 60–63?

SECURE 2.0 §109 created an enhanced catch-up contribution for participants who are ages 60, 61, 62, or 63 (as of December 31 of the plan year). For 2026, this "super catch-up" is $11,250 — versus the standard $8,000 catch-up for ages 50–59 and 64+. At age 64, the catch-up reverts to the standard $8,000 amount. The super catch-up is optional — your plan document must explicitly allow it, and your provider must support it. It is added on top of the $72,000 §415(c) base cap, bringing the total ceiling to $83,250.

Q11. Can a sole proprietor adopt a Solo 401(k) after December 31 and still make 2026 contributions?

Yes — for the first plan year only, under SECURE 2.0 §317. A sole proprietor or single-member LLC owner who has never had a Solo 401(k) can adopt a new plan after December 31, 2026, up until the unextended tax return due date (typically April 15, 2027), and still make employee elective deferrals for the 2026 plan year. This exception does not apply to S-corps or C-corps. It applies only to the first plan year — from year two onward, the normal December 31 plan establishment deadline applies. Filing extensions do not extend the post-year-end adoption window.

Q12. What happens to my Solo 401(k) if I hire employees?

Hiring a common-law employee (other than a spouse) who meets your plan's eligibility requirements generally disqualifies you from the one-participant Solo 401(k). You would typically need to either (a) convert to a regular 401(k) plan that covers all eligible employees, or (b) adopt a different plan type (SEP IRA, SIMPLE IRA) that allows employees. Contact your plan provider as soon as you anticipate hiring — the conversion requirements depend on the plan document and the new employee's eligibility date. Failing to cover eligible employees in a 401(k) can create significant tax exposure.

Sources & Disclaimer

Primary Sources (official IRS & DOL pages)

IRS: One-participant 401(k) plans
IRS Notice 2025-67 — 2026 Retirement Plan Limits
IRS IR-2025-111 — News release, November 13, 2025
IRS Publication 560 — Retirement Plans for Small Business (2026 edition)
Form 5500-EZ and Instructions
SECURE 2.0 Act of 2022, §109 (super catch-up), §317 (late plan adoption), §603 (mandatory Roth catch-up)

Disclaimer: This content is for educational and informational purposes only. It does not constitute tax, legal, financial, or investment advice. Contribution limits, deadlines, and rules may change. Always consult a licensed CPA, tax attorney, or ERISA professional before making retirement plan contributions or adopting a plan. SmartCalcLabs makes no representation regarding the accuracy of this information for your individual circumstances.

Last updated: October 29, 2026 | Tax year: 2026 | Calculator: Solo 401(k) Contribution Calculator