Solo 401k Calculator

A one-participant 401(k) is an ordinary 401(k) that covers a business owner with no employees, or the owner and a spouse. You contribute in two roles:

• As the employee: elective deferrals of up to 100% of your compensation, to a limit of $24,500, plus a catch-up from the year you turn 50.
• As the employer: a nonelective contribution of up to 25% of compensation. For a sole proprietor, compensation is net earnings after half of the self-employment tax and after the contribution itself, which makes the effective rate 20%.

Deferrals and employer money together cannot pass $72,000 or 100% of your compensation. The calculator gives you the largest deferral you have room for and then the largest employer contribution, and tells you which limit stops the total.

For a sole proprietor or partner, the IRS says to use the rate table and worksheets in chapter 5 of Publication 560. With deferrals, the Deduction Worksheet for Self-Employed runs to step 19. For a net profit of $100,000 at age 45 in 2026:

1. Deduction for half of self-employment tax: $7,065, so net earnings (step 3) are $92,935.
2. Employer limit at the 20% reduced rate (steps 5 to 7): $18,587.
3. Room under $72,000 after the $24,500 deferral (step 10): $47,500; half of net earnings after the deferral (step 12): $34,217.
4. Employer contribution, the smallest of those (step 13): $18,587.
5. Deferral allowed (step 15): $24,500. Maximum contribution (step 19): $43,087.

Step 12 is what keeps the total within your earnings when profit is low. At a net profit of about $252,400 the employer part reaches $47,500 and the total reaches $72,000. Catch-ups are added on steps 16 to 18 and are not counted in $72,000: at a $300,000 profit the total is $80,000 at 55 and $83,250 at 61.

If your business is a corporation that pays you a salary, the plan works on your W-2 wages. Income that passes through to you as an S corporation shareholder is not net earnings from self-employment and does not count. The employer can contribute up to 25% of your wages, counting wages up to $360,000, and your deferrals come out of the same wages. On a $100,000 salary: $24,500 of deferrals plus $25,000 from the corporation, $49,500 in all. A salary of $190,000 reaches $72,000.

If your 2025 FICA wages from the corporation were over $150,000, your 2026 catch-ups have to be Roth contributions. The rule looks only at FICA wages, so it does not apply to a sole proprietor's self-employment income.

The $24,500 deferral limit is yours, not the plan's: it covers all your deferrals to 401(k), 403(b), SIMPLE and SARSEP plans in the year, pre-tax and Roth, even with unrelated employers. The age-50 catch-up raises that personal limit, and you can split it between plans. A 457(b) plan has its own separate limit; see the 457b calculator.

The $72,000 limit on everything going into an account is figured separately for each unrelated employer's plan. So if you max out deferrals at work, your solo 401(k) can still receive the employer contribution. The IRS's own example: an employee who defers the full limit at work can still make the full nonelective contribution to a solo 401(k) if the side business earns enough. On a $150,000 net profit that is $27,881 in 2026.

• Form 5500-EZ. Required when the assets of all the business's one-participant plans are more than $250,000 at the end of the plan year, and for the final plan year.
• Setting it up. For 2023 and later years, a sole proprietor with no employees can adopt a 401(k) after the end of the tax year, by the tax filing deadline without extensions.
• No testing, until you hire. A plan with no common-law employees needs no nondiscrimination testing. Eligible employees you hire have to be let into the plan.
• Where you deduct it. A sole proprietor deducts contributions for themselves on Schedule 1 (Form 1040); Roth deferrals are not deductible.

A SEP set up with the IRS model Form 5305-SEP usually needs no annual return, but it takes employer money only; compare it in the SEP IRA calculator. The self-employment tax behind step 2 follows Schedule SE.