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

For 2026, the Solo 401(k) total contribution limit is $72,000 — combining employee elective deferrals (up to $24,500) plus employer profit-sharing (up to 25% of net SE income). Catch-up adds $8,000 at age 50+; SECURE 2.0 super catch-up adds $11,250 at ages 60-63. With catch-up, total possible contribution: $80,000 (50+) or $83,250 (60-63). The §415(c) total cap of $72,000 doesn't include catch-up — catch-up sits on top.

Who can open a Solo 401(k)?

Solo 401(k) plans are restricted to businesses with no W-2 common-law employees other than the owner and (if applicable) the owner's spouse. Eligible business structures: sole proprietorship, single-member LLC, multi-member LLC (where members are spouses), S-corp, partnership of spouses. The 'no employees' test excludes 1099 contractors (they don't count) and certain part-time workers under 1,000 hours/year (under SECURE 2.0's 500-hour-3-year rule, you'll need to include long-term part-timers).

Can a Solo 401(k) have Roth contributions?

Yes — fully. SECURE 2.0 (2022) mandated Roth options for all 401(k)-style plans. Solo 401(k) participants can designate any portion of their employee deferrals as Roth (post-tax, tax-free withdrawals at retirement). Employer profit-sharing contributions can also be Roth-designated as of 2024 (employer Roth contributions are taxable to the employee in the year of contribution). For high earners ineligible for direct Roth IRA contributions, Solo 401(k) Roth is the cleanest path to tax-diverse retirement savings.

When is the Solo 401(k) setup deadline?

Solo 401(k) plans must be established by December 31 of the tax year for elective deferrals to count. Employer profit-sharing contributions can be made up to the tax filing deadline including extensions. So for tax year 2026, the plan must exist by December 31, 2026, and you can fund the employer share through October 15, 2027 (with extension). SECURE Act 2019 §201 changed the prior law that required setup by year-end for ALL contributions; now employer-side has the late funding window.

Can I take a loan from my Solo 401(k)?

Yes — up to 50% of your vested balance, capped at $50,000. Loans are repaid via after-tax dollars over 5 years (or longer if used for a primary residence purchase). Interest typically prime + 1-2%, paid back to your own account. This is a unique advantage over SEP IRA / SIMPLE IRA / Traditional IRA, which prohibit loans entirely. The loan must be properly documented, on a written promissory note, with regular amortizing payments. Default triggers a deemed distribution + 10% penalty if under 59½.

Solo 401(k) vs SEP IRA — which is better?

Solo 401(k) usually wins below ~$200K of net SE income because of the dual-contribution structure. At $80K SE income: Solo 401(k) allows $24,500 (employee) + $15,884 (25% employer) = $40,384. SEP allows just the 25% employer share = $15,884 — Solo 401(k) wins by $24,500. At $200K+ both plans converge at the $72,000 cap. Choose SEP IRA for simplicity (no Form 5500-EZ paperwork) and late-funding flexibility (Oct 15 with extension). Choose Solo 401(k) for higher contributions at moderate incomes, Roth option, and loan provision.

Do I need to file Form 5500?

Once your Solo 401(k) total assets cross $250,000, you must file Form 5500-EZ (a simplified version for one-participant plans) annually by July 31. Below $250K, no filing required. The 5500-EZ is short — usually 1 page — but you must file every year once you cross the threshold, even if assets later drop below $250K. Penalty for late filing: $250/day, up to $150K. Most online Solo 401(k) providers (Fidelity, Schwab, ETrade) help with the filing.

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

Yes — if your spouse legitimately works in your business and is paid W-2 wages, they can be a participant in the same Solo 401(k) plan. Both of you can contribute the full $24,500 employee deferral plus catch-up if applicable, and the employer can make profit-sharing contributions for both. For a married couple business, this effectively doubles the household's tax-advantaged retirement capacity to potentially $144,000+ per year (2 × $72K cap).

Updated for 2026

Solo 401(k)

$24,500 employee deferral plus 25% employer profit-sharing up to $72,000 total in 2026. The highest-ceiling self-employment retirement plan, with Roth option and loan provision.

2026 Solo 401(k) Key Numbers

Employee Deferral

$24,500

Employer Share

25% comp

Total Cap

$72,000

Catch-up at 50+

$8,000

Plan must exist by Dec 31 of the tax year for employee deferrals. Employer profit-sharing can be funded up to tax filing deadline + extensions. Form 5500-EZ required once assets exceed $250,000.

Source: IRS One-Participant 401(k) Page · IRS Notice 2025-67 (2026 limits) · IRC §401(k) and §415(c).

What is a Solo 401(k)?

A Solo — also called Individual 401(k), One-Participant 401(k), or Uni-401(k) — is a 401(k) plan designed for self-employed individuals with no employees other than themselves and (optionally) their spouse. It carries the same contribution limits and tax treatment as a regular 401(k), but skips most of the ERISA compliance burden because there's no non-owner employee to protect.

The contribution structure has two components: (1) an employee elective deferral of up to $24,500 in 2026, and (2) an employer profit-sharing contribution of up to 25% of net self-employment income (effectively ~20% after the half-SE-tax adjustment for sole props). Combined cap: $72,000, plus $8,000 catch-up at 50+ and $11,250 super catch-up at ages 60-63.

The Solo is the highest-contribution self-employment retirement vehicle available — at moderate incomes ($80-150K SE), it doubles or triples what a SEP IRA allows. It also offers Roth contributions (since ) and participant loans (up to $50K) — features unavailable in SEP or SIMPLE IRAs. The trade-offs are slightly more setup complexity and Form 5500-EZ filing once assets cross $250K.

How Solo 401(k) contributions work

EMPLOYEE SIDE

1.Defer up to $24,500 of compensation by Dec 31 of the tax year.
2.Add $8,000 catch-up at 50+, or $11,250 SECURE 2.0 super catch-up at 60-63.
3.Choose Traditional pre-tax OR Roth (post-tax) — split however you like across both.
4.Aggregate cap across all employers: $24,500 (so W-2 401(k) deferrals reduce Solo 401(k) employee deferral room).

EMPLOYER SIDE

1.Profit-sharing contribution: up to 25% of compensation (Schedule C / W-2 wages).
2.Sole prop effective rate: ~20% of net SE earnings after half-SE-tax adjustment.
3.Funded by tax filing deadline + extensions (~Oct 15, 2027).
4.Combined employee + employer cannot exceed §415(c) cap of $72,000 (catch-up sits above).

When Solo 401(k) makes sense

You're self-employed with no common-law employees

Solo — also called Individual 401(k), One-Participant 401(k), or Uni-401(k) — is restricted to businesses with NO eligible employees other than the owner (and the owner's spouse). The moment you hire a non-spouse employee who works 1,000+ hours/year (or 500+ hours/year for 3 consecutive years under long-term part-time rules), you must convert the plan to a regular 401(k) with full ERISA compliance, nondiscrimination testing, and Form 5500.

You want to maximize tax-deferred contributions

Solo has the highest contribution ceiling of any self-employment retirement plan: $72,000 total for 2026 ($80,000 with $8,000 catch-up at 50+, $83,250 with $11,250 super catch-up at 60-63). At incomes above ~$200K of net SE income, Solo 401(k) and SEP IRA converge at the same $72,000 cap — but Solo 401(k) wins decisively at lower incomes because of the dual employee-deferral + employer-share structure.

You want the Roth option

Solo is the only self-employment retirement plan with fully-supported Roth contributions in 2026. mandated Roth designations for all 401(k)-style plans. SEP IRA Roth is theoretically available but most providers haven't rolled it out; SIMPLE IRA Roth is supported by major custodians but adoption is still growing. For self-employed people who want flexibility between pre-tax and Roth deferrals, Solo 401(k) is the default choice.

You may need to borrow against retirement savings

Solo is the only self-employment retirement plan that allows participant loans. You can borrow up to 50% of your vested balance (max $50,000) for any reason and repay it back to your own account at a moderate interest rate over 5 years (longer for primary-residence purchase). SEP IRA, SIMPLE IRA, and Traditional IRA all prohibit loans entirely. For founders bridging cash gaps or buying real estate, the Solo 401(k) loan provision is genuinely useful.

You have a side business plus W-2 income with 401(k)

Employee elective deferrals are aggregated across ALL employer plans for the calendar year. If you defer $24,500 into your , you cannot defer additional employee dollars into a Solo 401(k) on a side business — the $24,500 cap is per-person. BUT you can still receive the full employer profit-sharing share on the Solo 401(k) (25% of net SE income up to ~$47,500), which is independent of the employee deferral cap. Stacked $24,500 + $47,500 = $72,000 still possible.

Worked examples

Three Solo 401(k) scenarios across different self-employment income levels.

EXAMPLE 1 — Sole prop consultant, $80K net SE income, age 35

Schedule C net profit: $80,000
Half SE tax adjustment: −$5,652
Adjusted compensation: $74,348
Employee deferral (max): $24,500
Employer profit-sharing (~20% × net SE): $14,870
Total Solo 401(k) contribution: $39,370
SEP IRA alternative would allow: $14,870

Solo 401(k) wins by $24,500 at this income — entirely due to the employee elective deferral that SEP doesn't have.

EXAMPLE 2 — Sole prop consultant, $200K net SE income, age 55

Schedule C net profit: $200,000
Adjusted compensation (after half-SE-tax): $189,109
Employee deferral: $24,500
Catch-up (50+): $8,000
Employer profit-sharing (25% × adjusted): $37,822
Total Solo 401(k) contribution: $70,322
Federal income tax saved (32% bracket): ~$22,503

Catch-up sits ABOVE the §415(c) cap. Without catch-up: $62,322. With $8K catch-up at 50+: $70,322.

EXAMPLE 3 — Side-business owner, $150K W-2 + $60K SE income, age 40

W-2 401(k) deferral (already maxed): $24,500
Solo 401(k) employee deferral room: $0 (capped across plans)
Solo 401(k) employer profit-sharing on $60K SE: $11,152
Combined retirement savings (W-2 plan + Solo): $24,500 + $11,152 = $35,652
Plus W-2 employer match estimate: ~$7,500

Employee deferral cap is per-person across all employers ($24,500), but the employer share on the side business is independent. Side business adds ~$11K of additional tax-deferred capacity beyond the W-2 plan.

Solo 401(k) vs SEP IRA vs SIMPLE IRA

	Solo 401(k)	SEP IRA	SIMPLE IRA
Best for	Solo + max contribution	Solo + simplicity	Small biz with employees
Total cap (2026)	$72,000 ($80K w/ catch-up)	$72,000	$16,500 + 3% match
Employee deferrals?	Yes ($24,500)	No	Yes ($16,500)
Roth option?	Yes (employee + employer)	No (pending guidance)	Yes (post-SECURE 2.0)
Loans allowed?	Yes (up to $50K)	No	No
Employees allowed?	No (spouse only)	Yes (proportional rule)	Yes (up to 100)
Form 5500 required?	Yes (5500-EZ if assets > $250K)	No	No
Plan setup deadline	Dec 31 (deferrals)	Tax filing + extensions	October 1

Compare self-employment retirement plans

Solo 401(k) is the highest-ceiling self-employment plan, but not always the right fit. Run your numbers across all three before locking in.

SEP IRA guide →SIMPLE IRA guide → 401(k) calculator →1099 / SE tax calculator →2026 contribution limits →Self-employment tax rate (15.3%) →