Solo 401(k) Calculator 2026
$24,500 deferral + 20% employer share, $72,000 to $83,250 total cap
Last updated: November 2025 · Sources: IRS Notice 2025-67, Pub. 560, SECURE 2.0
Business & Personal Info
Schedule C net profit before any retirement contributions.
50+ unlocks $8,000 catch-up; ages 60-63 use $11,250 super catch-up (SECURE 2.0 §109).
0% = all pretax; 100% = all Roth designated. Plan must support Roth (most do).
Contribution Breakdown
Federal Tax Savings
Understanding the 2026 Solo 401(k)
Two Contributions in One Plan
The Solo 401(k) lets a one-person business wear two hats: (1) employee elective deferral up to $24,500 ($32,500 at 50+, $35,750 at ages 60-63 under SECURE 2.0 §109), and (2) employer profit-sharing of 25% of W-2 wages (S-corp) or 20% of adjusted SE compensation (sole prop). The combined §415(c) cap is $72,000 in 2026 ($80,000 at 50+, $83,250 at ages 60-63). This stacking is the reason the Solo 401(k) almost always beats the SEP-IRA for owner-only businesses.
Sole Prop vs S-Corp Math
Sole proprietor: employer profit-share uses the IRS reduced-rate 20% formula on (net SE × 0.9235 minus half SE tax). S-corp owner-employee: a clean 25% of W-2 Box 1 wages. The S-corp path requires you to first pay yourself "reasonable compensation" as W-2 wages (subject to FICA), which is often LESS than your total business profit (the rest taken as distributions to save SE tax). The trade-off: low W-2 wages save SE tax but cap your retirement contribution. Many S-corp owners deliberately set W-2 wages high enough to max the Solo 401(k).
Controlled Group Restrictions
The Solo 401(k) is reserved for businesses with ONE owner (or owner + spouse) and zero common-law employees. The IRS controlled-group rules (IRC §414(b), (c), (m)) extend this: if you own another business that has W-2 employees, those employees may need to be covered too. Common pitfalls: a part-time worker who exceeds 500 hours/year for 2 consecutive years (SECURE 2.0 long-term part-time rule, effective 2024); a 1099 contractor reclassified as an employee under the §3508 test; a spouse with a separate business where you also have an ownership interest. If you violate the rule, the plan can be disqualified and contributions retroactively taxed.
Form 5500-EZ Filing Requirement
Once your Solo 401(k) plan aggregate balance (across all participants, usually you and spouse) exceeds $250,000 at year-end, you must file Form 5500-EZ by July 31 of the following year. The form is one page and free to file electronically via EFAST2. Failure to file carries IRS penalties up to $250/day capped at $150,000. There is also a one-time "final return" filing requirement when you terminate the plan, regardless of balance.
Roth Designated Account
SECURE 2.0 §603 made Roth contributions standard in 2026 plan documents. Most providers (Fidelity, Schwab, E*TRADE, Carry, Ocho) support: (1) Roth on the employee deferral portion, (2) since SECURE 2.0 §604, Roth on the employer profit-share too (if plan permits). High-earner S-corp owners (W-2 wages prior year above $145,000) MUST make catch-up contributions on a Roth basis only starting 2026. Roth Solo 401(k) is not subject to the Roth IRA income phase-outs, you can contribute regardless of MAGI.
Spousal Contributions
If your spouse performs legitimate work for the business and receives earned income (W-2 wages from the S-corp, or guaranteed payments from a partnership), they can participate in the same Solo 401(k) plan. Each spouse gets their own $24,500 employee deferral and 20%/25% employer share, so a couple can potentially contribute up to $144,000 ($72,000 each) under the combined §415(c) cap. This essentially doubles your retirement savings capacity for the same business.
Loans from a Solo 401(k)
If your plan document permits loans, you can borrow up to 50% of your vested balance or $50,000 (whichever is less), with 5-year repayment at prime + 1-2% interest paid back to your own account. Note: most discount-broker Solo 401(k) plan documents (Fidelity, Vanguard, Schwab) do NOT permit loans, you need a "third-party administrator" Solo 401(k) (myCAFO, Solo401kProvider, Carry) to enable this feature. Loans are not taxable; defaults become deemed distributions subject to income tax + 10% early withdrawal penalty if under 59½.
Frequently Asked Questions
Solo 401(k) vs SEP-IRA?
The Solo 401(k) almost always wins for owner-only businesses because it stacks a $24,500 employee deferral on top of the 20% employer profit-share. At $100k net SE: SEP = $17,057; Solo = $41,557.
Can I open a Solo 401(k) with employees?
No. Solo 401(k) is for businesses with one owner (or owner + spouse) and zero common-law employees. Controlled-group rules and long-term part-time worker rules can trap you if you have related businesses or part-time staff.
When must I file Form 5500-EZ?
Once your Solo 401(k) plan balance exceeds $250,000 at year-end. File by July 31 of the following year via EFAST2 (one-page, free). Penalty for non-filing up to $250/day capped at $150,000.
Does my plan support Roth?
Yes if your plan document allows it. Most providers support Roth on the employee deferral; SECURE 2.0 §604 also enables Roth employer contributions. Roth Solo 401(k) is not subject to Roth IRA MAGI limits.
Can my spouse contribute too?
Yes if they perform legitimate work and receive earned income. Each spouse gets their own $24,500 employee deferral and employer share, so a couple can contribute up to $144,000 combined under the $72,000-per-person cap.
Can I take a loan?
Yes if your plan document permits. Up to 50% of vested balance or $50,000 (whichever is less), 5-year repayment, prime + 1-2% interest. Most discount-broker plan documents do not allow loans, use a TPA-style plan if you need this feature.