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Calculate maximum Solo 401(k) contributions for self-employed individuals with 2025 limits ($23,500 employee + $7,500 catch-up + 25% employer). Compares sole proprietor, S-Corp, LLC structures, includes spouse contributions, tax savings analysis, and SEP IRA/SIMPLE IRA comparison.

Frequently Asked Questions

What is the maximum Solo 401(k) contribution for 2025?

2025 maximum: $70,000 total ($77,500 if age 50+).

Breakdown: Employee elective deferral $23,500 + Catch-up $7,500 (age 50+) + Employer profit-sharing up to 25% of compensation (S-Corp/LLC) or 20% of net self-employment income (sole proprietor).

Example: 45-year-old sole proprietor earning $150k net can contribute $53,500 total ($23,500 employee + $30,000 employer @ 20%).

How does Solo 401(k) differ for sole proprietor vs S-Corp?

Sole proprietor: Employer contribution = 20% of net self-employment income (after deducting 1/2 SE tax).

S-Corp: Employer contribution = 25% of W-2 wages (no SE tax).

Key difference: S-Corp can contribute more at lower income levels.

Example: $100k income—Sole prop maxes $20k employer, S-Corp with $80k W-2 maxes $20k employer but saves $7,650 SE tax.

S-Corp optimal for >$100k income with reasonable W-2 salary.

Should I choose Solo 401(k) or SEP IRA?

Solo 401(k) advantages: Higher contribution limits (2x employee + employer vs SEP employer-only), $23,500 employee deferral regardless of income (SEP limited to 25% of W-2 or 20% net SE income), Roth option, loan provisions ($50k), earlier access (age 59.5 vs 59.5 + still working).

SEP IRA: Simpler administration, no annual filing (unless >$250k assets).

Choose Solo 401(k) if: Income <$150k (employee deferral crucial), want Roth conversions, need loan access.

Choose SEP IRA if: Income >$300k (same contribution, less complexity).

Can I contribute to Solo 401(k) if I have a W-2 job?

Yes, but employee elective deferral limit ($23,500) is shared across ALL 401(k) plans.

Example: W-2 job contributes $15,000 to employer 401(k)—you can only contribute $8,500 employee elective to Solo 401(k).

However, employer profit-sharing contribution to Solo 401(k) is NOT affected (still up to 25%/20% of self-employment income).

Strategy: Max W-2 employer 401(k) match first, then Solo 401(k) employer contribution, then remaining employee elective to Solo 401(k).

What are Solo 401(k) contribution deadlines for 2025?

Employee elective deferrals: Must be made by December 31, 2025 (cannot extend).

Employer profit-sharing contributions: Due by business tax filing deadline—April 15, 2026 for sole proprietors/LLCs (extendable to October 15, 2026), March 15, 2026 for S-Corps (extendable to September 15, 2026).

Strategy: Wait to calculate employer contribution after year-end to optimize tax bracket/income, but set up automatic employee deferrals monthly to avoid cash flow crunch.

What are common Solo 401(k) mistakes that reduce contributions?

Top 5 costly mistakes: (1) Not separating employee/employer contributions—claiming only 20% total vs 20% employer + $23,500 employee = $20k vs $53k. (2) Forgetting catch-up at 50—missing $7,500/year = $112,500 over 15 years. (3) Using gross income for sole prop—must deduct 1/2 SE tax first, reducing base by 7.65%. (4) Missing spouse contributions—if spouse has ANY self-employment income, can contribute full $70k separately. (5) Exceeding W-2 limitations—S-Corp can only defer up to actual W-2 wages (can't defer $23,500 on $15k salary).

About This Page

Editorial & Updates

  • Author: SuperCalc Editorial Team
  • Reviewed: SuperCalc Editors (clarity & accuracy)
  • Last updated: 2026-01-13

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Financial/Tax Disclaimer

This tool does not provide financial, investment, or tax advice. Calculations are estimates and may not reflect your specific situation. Consider consulting a licensed professional before making decisions.