Solo 401(k) contribution limits for self-employed 2026
Summary
Sources: IRS retirement plan limitation notices, Publication 560, one-participant 401(k) plan guidance.
Educational only — not tax, legal, or investment advice. Confirm rates, thresholds, and forms with IRS.gov and a licensed CPA or enrolled agent for your facts.
A Solo 401(k) (one-participant 401(k)) lets owner-only businesses combine employee deferrals and employer profit-sharing. Limits are indexed annually—substitute IRS 2026 numbers when published.
1. Two contribution buckets
| Bucket | Source | Typical cap basis |
|---|---|---|
| Elective deferral | Employee (you) | IRS employee 401(k) limit |
| Employer sharing | Employer (your business) | ~25% of net earnings from self-employment |
| Catch-up (50+) | Employee | Additional deferral above standard |
2. Net earnings from self-employment
Start with Schedule C (or K-1) net profit, subtract deductible part of SE tax and any plan contributions for the employer share calculation—follow IRS worksheet in Publication 560.
3. Illustrative 2026 example
Net earnings from self-employment $120,000 (simplified), under age 50:
- Elective deferral: up to employee limit (e.g., ~$23,500 indexed—verify IRS)
- Employer profit-sharing: ~25% of net earnings after adjustments ≈ $27,000 direction
- Combined cannot exceed annual addition limit (e.g., ~$70,000 indexed total additions)
4. Roth Solo 401(k)
Plan document must allow Roth deferrals. Employer share is always pre-tax traditional. Roth conversions and rollovers follow 401(k) rules.
5. Spouse employed by business
Each eligible participant has separate limits if bona fide services and compensation are documented.
6. Form 5500-EZ
When plan assets exceed IRS threshold, annual Form 5500-EZ filing may be required—track balances across providers.
7. S-Corp twist
S-Corp owners use W-2 wages as compensation base for deferrals; insufficient wages cap deferrals even if distributions are high.
8. Deadlines
| Action | Deadline (typical) |
|---|---|
| Establish plan | Dec 31 of tax year |
| Employee deferral | Dec 31 (payroll date) |
| Employer contribution | Tax filing deadline including extensions |
Official sources
Excess contributions trigger excise tax until corrected—monitor combined limits when also contributing to IRAs.
FAQ
What is the Solo 401(k) combined limit?
Employee elective deferrals plus employer contributions cannot exceed the IRS annual addition limit (indexed yearly) per participant, subject to compensation definitions.
Can I make catch-up contributions?
Participants age 50+ may make additional elective deferrals beyond the standard employee limit if the plan allows.
When must I establish a Solo 401(k) for 2026?
Generally by December 31, 2026, for contributions to count for that tax year—unlike SEP IRAs which can be opened by the filing deadline.