Federal Solo 401(k) Contribution Calculator

How this calculator works

Section 401(k) of the Internal Revenue Code creates the Cash or Deferred Arrangement — the modern "401(k)" — that lets an employee elect to defer current compensation into a qualified retirement trust. The Solo 401(k) (marketed as the "Individual 401(k)" or "Self-Employed 401(k)") is the same plan structure scaled down to a one-person business. It is the single most powerful retirement vehicle available to self-employed savers with no W-2 employees other than the owner and the owner's spouse — it stacks an employee elective deferral bucket on top of an employer profit-sharing bucket, captures the SECURE Act 2.0 enhanced catch-up for ages 60-63, and (with the right plan document) supports a mega backdoor Roth path that pushes $50K+ into Roth annually beyond the regular limits.

This calculator computes the maximum Solo 401(k) contribution for the 2026 tax year across both buckets, applies the § 415(c) combined annual additions ceiling and the § 401(a)(17) compensation cap, models the entity-type variations (sole prop / partnership at the 20% effective rate vs. S-corporation at the 25% rate on W-2 wages), and surfaces the SECURE 2.0 § 109 super catch-up for participants ages 60-63.

The two-bucket structure

The headline structural advantage of the Solo 401(k) over the better-known SEP-IRA is the SEPARATE employee elective deferral bucket. A SEP-IRA has only the employer-contribution bucket (capped at 25% of compensation). The Solo 401(k) stacks an employee elective deferral on top:

1. Employee elective deferral (§ 402(g)) — 2026 estimated limit $23,500 (up from $23,000 in 2025). Per-person aggregate across all 401(k) plans the individual participates in, so a Solo 401(k) deferral shares the cap with any W-2 day-job 401(k) deferral. Can be either traditional pre-tax (immediate deduction; ordinary-income taxable on withdrawal) or Roth (no immediate deduction; tax-free withdrawal after 59½ + 5-year clock).

2. Employer profit-sharing (§ 404(a)(3) read with § 415) — up to 25% of "compensation." The compensation definition differs by entity type. Always traditional pre-tax by default (SECURE 2.0 § 604 permits Roth employer contributions but most plan documents have not adopted the optional provision).

Combined § 415(c) annual additions ceiling: $73,500 estimated for 2026 (up from $70,000 in 2025; up from $69,000 in 2024). Plus the catch-up amounts under § 414(v), which STACK ON TOP of the § 415(c) ceiling:

• Age 50-59 + age 64+: $7,500 regular catch-up → $81,000 total ceiling.
• Age 60-63 inclusive: $11,250 SECURE 2.0 super catch-up → $84,750 total ceiling.

Compensation limit (§ 401(a)(17)): $355,000 estimated for 2026 — the maximum compensation that can be considered for any qualified-plan contribution calculation.

Worked example 1 — sole prop, $80K net SE income, age 45

A sole proprietor with $80,000 of net Schedule C income, age 45, no other 401(k) participation, 2026 tax year:

• Half-SE approximation: $80,000 × 0.9235 × 0.153 / 2 ≈ $5,652. (The actual Schedule SE half-SE deduction is computed on net SE earnings; this calculator uses an approximation that closely tracks the IRS Pub. 560 worksheet.)
• Effective compensation: $80,000 − $5,652 ≈ $74,348.
• Employer profit-sharing (20% effective rate): $74,348 × 20% ≈ $14,870.
• Employee elective deferral: $23,500 (under § 402(g) base; no catch-up at age 45).
• Total contribution: ~$23,500 + ~$14,870 ≈ $38,370.
• § 415(c) ceiling: $73,500 (no catch-up). Ceiling does not bind.
• § 401(a)(17) cap: $355,000. Does not bind.

Compare to a SEP-IRA at the same $80K net SE income: SEP allows only the employer bucket at 20% of post-half-SE income, capping the contribution at ~$14,870. The Solo 401(k) holds ~$23,500 more — every year — purely because of the second bucket. Over a 20-year working horizon at 7% growth, that's ~$1,000,000+ of additional retirement balance from the same income.

Worked example 2 — sole prop, $200K net SE, age 55

Same sole proprietor, but $200,000 net SE and age 55 (first year of catch-up eligibility):

• Half-SE approximation: $200,000 × 0.9235 × 0.153 / 2 ≈ $14,130.
• Effective compensation: $200,000 − $14,130 ≈ $185,870.
• Employer profit-sharing (20%): $185,870 × 20% ≈ $37,174.
• Employee elective deferral: $23,500 base + $7,500 § 414(v) catch-up = $31,000.
• Total contribution: ~$31,000 + ~$37,174 ≈ $68,174.
• § 415(c) ceiling with age 50+ catch-up: $73,500 + $7,500 = $81,000. Ceiling does not bind ($68K < $81K headroom).

The age 50+ catch-up adds $7,500 of capacity on top of both the § 402(g) base AND the § 415(c) ceiling — the catch-up amounts are statutorily carved out of the § 415(c) cap under the § 414(v) override.

Worked example 3 — S-corp owner, $150K W-2, age 60

S-corporation owner-employee with $150,000 of W-2 box 1 wages from the S-corp (plus some K-1 distributive share not relevant to this calculation), age 60 (entering the SECURE 2.0 super catch-up window):

• Compensation base: $150,000 W-2 wages directly (no half-SE adjustment — the S-corp's contribution is deducted on Form 1120-S without circular interaction with the wage base).
• Employer profit-sharing (25% of W-2): $150,000 × 25% = $37,500.
• Employee elective deferral: $23,500 base + $11,250 SECURE 2.0 super catch-up = $34,750. (The super catch-up REPLACES the regular $7,500 catch-up for the 4-year window of ages 60-63; at age 64 the participant drops back to $7,500.)
• Total contribution: $34,750 + $37,500 = $72,250.
• § 415(c) ceiling with super catch-up: $73,500 + $11,250 = $84,750. Ceiling does not bind.

The super catch-up is a meaningful boost worth planning around. For an S-corp owner who turns 60 mid-year, the catch-up applies for the entire tax year — and the 4-year window (ages 60, 61, 62, 63) is the highest-capacity stretch in the Solo 401(k) lifecycle. At age 64 the participant drops back to the regular $7,500 catch-up, reducing capacity by $3,750/yr.

Worked example 4 — sole prop, $500K net SE, age 45 (§ 415(c) binds)

Very-high-earning sole proprietor with $500,000 net SE income, age 45:

• Half-SE approximation: $500,000 × 0.9235 × 0.153 / 2 ≈ $35,322.
• Effective compensation (pre-cap): $500,000 − $35,322 ≈ $464,678. Above the § 401(a)(17) cap.
• Effective compensation (capped): $355,000.
• Maximum employer contribution at 20%: $355,000 × 20% = $71,000.
• Employee elective deferral: $23,500.
• Pre-cap total: $23,500 + $71,000 = $94,500. Exceeds the § 415(c) ceiling of $73,500.
• Capped employer contribution: $73,500 − $23,500 = $50,000.
• Total contribution (after § 415(c)): $23,500 + $50,000 = $73,500.

For very-high-earners, the § 415(c) ceiling binds before the § 401(a)(17) compensation cap. Above ~$292,500 of post-half-SE income (or ~$315,000 of pre-half-SE net SE income), additional income produces no additional Solo 401(k) capacity. The next planning move at that income level is a defined-benefit / cash-balance plan (separate § 415(b) limits up to ~$280,000/yr annual benefit, indexed; can fund $200K-$400K/yr depending on age and income).

Worked example 5 — 28% marginal rate, $50K contribution

An owner-participant contributing a total of $50,000 to the Solo 401(k) at a 28% marginal federal rate captures:

• Federal tax savings: $50,000 × 28% = $14,000.

The contribution is deductible against ordinary income (traditional pre-tax election). At a 28% bracket the deduction is worth $14,000 of immediate federal tax savings — separate from any state-tax savings (most states conform to the federal qualified-plan treatment) and from the tax-free growth on the contribution over the working horizon.

The sole-prop circular math, explained

The 25% statutory employer contribution rate under § 404(a)(3) is defined relative to "compensation" AFTER the employer's deduction for the contribution itself. For a sole proprietor, the contribution reduces the SE-income base — which reduces the next year's allowable contribution. The math is circular:

contribution = 25% × (net SE − half-SE − contribution)

Solving algebraically: contribution × (1 + 0.25) = 0.25 × (net SE − half-SE), so contribution = (net SE − half-SE) × (0.25 / 1.25) = (net SE − half-SE) × 0.20.

The 20% figure is the SAME 25% rate, expressed against the pre-contribution income base instead of the post-contribution base. IRS Publication 560 publishes a lookup table and worksheet that bakes the 20% number in. The S-corp variant escapes the circularity because the S-corp's contribution is deducted on Form 1120-S as a separate line item that doesn't reduce the W-2 wage base — so the 25% rate applies directly to W-2 wages.

The S-corp tradeoff — SE-tax savings vs. Solo 401(k) capacity

S-corp owner-employees split their business income into two streams: (a) W-2 wages — subject to FICA, and (b) K-1 distributive share — NOT subject to SE tax or FICA. The structural tax savings is real: a sole prop with $130K net SE pays SE tax on the full base; an S-corp with $80K W-2 + $50K K-1 saves ~$7,500/yr in SE tax by keeping the K-1 portion out of FICA. But the K-1 distributive share is NOT eligible compensation for Solo 401(k) purposes under § 415(c) — only the W-2 wages count.

Run the comparison both ways before electing S-corp status purely for SE-tax reasons. A sole prop at $130K net SE has roughly $24,000 of employer Solo 401(k) capacity (~$120K post-half-SE × 20%). The S-corp with $80K W-2 + $50K K-1 has only $20,000 of employer capacity ($80K × 25%). Optimal W-2 / K-1 split depends on (a) retirement contribution priority, (b) payroll-tax savings target, and (c) reasonable-compensation defensibility under § 162 — the IRS audits low-W-2 strategies aggressively, particularly when the W-2 is set below market-rate for the services performed.

Solo 401(k) vs. SEP-IRA — when to choose which

The Solo 401(k) and SEP-IRA both serve self-employed savers but differ structurally:

| Feature | Solo 401(k) | SEP-IRA | |---|---|---| | Employee deferral bucket | Yes ($23,500 est.) | No | | Employer profit-sharing bucket | Yes (25% / 20%) | Yes (25% / 20%) | | Age 50+ catch-up | Yes ($7,500) | No | | SECURE 2.0 super catch-up (60-63) | Yes ($11,250) | No | | Roth contributions | Yes (deferral) | No | | Participant loans | Optional (plan-dependent) | No | | Mega backdoor Roth | Plan-dependent | No | | Form 5500-EZ filing | Once assets > $250K | Never |

For most self-employed savers, the Solo 401(k)'s structural advantages dominate. The SEP-IRA's only meaningful advantages are (a) marginally simpler setup and (b) the ability to contribute up to the tax-filing deadline INCLUDING extensions (Solo 401(k) requires plan adoption by December 31 of the contribution year, though the contribution can be funded up to the tax-filing deadline). For owners who set up a retirement plan late and need to fund the prior year, SEP-IRA may be the only option — for owners planning ahead, Solo 401(k) is structurally superior.

The mega backdoor Roth variant

If the Solo 401(k) plan document allows after-tax (non-Roth) employee contributions and in-plan Roth conversions under IRS Notice 2014-54, the participant can fund the remaining § 415(c) headroom (between the regular contribution total and the $73,500 ceiling) with after-tax dollars and immediately convert to Roth.

Worked example: A sole prop with $80K net SE at age 45 has a regular contribution of $23,500 + $14,870 ≈ $38,370. The § 415(c) headroom is $73,500 − $38,370 = $35,130 available for after-tax + in-plan-Roth. That's $35,130 of additional Roth contribution annually, beyond the regular Solo 401(k) limits — pure tax-free retirement growth.

Most off-the-shelf Solo 401(k) providers (Fidelity, Vanguard, Schwab, E*Trade) do NOT support the mega backdoor — they use bare-bones IRS prototype plan documents without the optional after-tax + in-plan-conversion provisions. Specialty providers that do support it: Mysolo401k.net, Discount Solo 401k, Carry (formerly Ocho), and certain custom plan-document services. Verify both features (after-tax contributions AND in-plan Roth conversion) with the plan administrator before relying on the strategy.

Form 5500-EZ — the only ongoing filing requirement

Solo 401(k) plans must file Form 5500-EZ (Annual Return for One-Participant Plans) once plan assets exceed $250,000 at year-end. The 5500-EZ is one of the lowest-administrative-cost qualified plan filings in the Code: one-page form, free to file, no audit requirement, due July 31 of the following year (with extension available to October 15 on Form 5558). Below the $250K asset threshold, no filing is required. Final return (Form 5500-EZ marked "final") is required when the plan terminates, regardless of asset level.

Common errors

• Confusing the 20% and 25% rates. Sole prop / partnership uses 20%; S-corp uses 25%. Mixing them up double-counts or under-counts the employer contribution.
• Including K-1 distributive share in the S-corp comp base. Only W-2 box 1 wages count. K-1 distributions are not eligible compensation under § 415(c).
• Forgetting the per-person § 402(g) cap. Day-job 401(k) deferral shares the $23,500 cap with the Solo 401(k) deferral. Over-deferring triggers a corrective-distribution requirement by April 15.
• Hiring W-2 employees without converting the plan. The 1,000-hour threshold (or 500 hours over 3 consecutive years under SECURE 2.0) ends Solo status. The plan must convert to a regular 401(k) with full nondiscrimination testing and Form 5500 (not 5500-EZ) filings.
• Missing the December 31 plan-adoption deadline. Solo 401(k) plans must be established (plan document signed) by December 31 of the contribution year. Contributions can be made up to the tax-filing deadline including extensions, but the PLAN itself must exist by year-end. (SEP-IRAs do not have this constraint — they can be established and funded up to the tax-filing deadline.)
• Mega backdoor without plan support. Many off-the-shelf Solo 401(k) plans do not allow after-tax contributions or in-plan Roth conversions. Verify with the plan administrator before relying on the strategy — the strategy fails entirely without both features.
• Skipping the SECURE 2.0 super catch-up. The $11,250 catch-up for ages 60-63 is significantly larger than the $7,500 regular catch-up — owners turning 60 should adjust their deferral elections to capture the additional $3,750/yr of capacity.

This calculator is a planning tool, not advice. The 2026 contribution limits are inflation-projected estimates pending the IRS's final late-2025 release; verify against the published figures before relying on them for actual plan administration. The Solo 401(k) mechanics are well-defined statutorily but interact with entity-structure decisions (sole prop vs. S-corp), reasonable-compensation defensibility under § 162, the multi-job § 402(g) cap, and the mega backdoor plan-document requirements — these interactions benefit from review by a CPA or financial planner who handles small-business retirement planning as a regular practice. Tools, not advice.