Retirement · Self-employed · Small business
Solo 401(k) Maximizer
Wear both hats — employee deferral and employer profit-sharing — capped by §415(c). Compare against a SEP-IRA at the same income.
Do you also have a job?
The deferral limit is per person, not per plan. Leave these at $0 if this business is your only work.
Contribution breakdown
Employee elective deferral
Your own money, pre-tax or Roth.
$23,500
Employer profit-sharing
20% × (net profit − ½ SE tax)
$18,587
Total Solo 401(k) contribution
$42,087
Estimated SE tax $14,130 · ½ SE tax $7,065 · employer base $92,935.
Elective deferral limit binds. Employer contribution is under the §415(c) cap.
SEP-IRA at the same income
Employer-only, no deferral, no catch-up.
$18,587
Solo 401(k) beats SEP by $23,500 at this income — the employee deferral and catch-ups are the wedge.
Two honest caveats
- S-corp salary tension: a lower salary saves FICA but shrinks the 25% employer base — and salary must stay defensible as reasonable compensation. Model the trade-off in the S-Corp Savings Calculator before optimizing either number alone.
- Low-income precision: total contributions can never exceed compensation, and where employer contributions interact with that 100% limit, IRS Pub 560's deduction worksheet can come out slightly stricter than this estimate — run the worksheet (or ask your CPA) before funding at net profit under ~$30,000.
Related resources
Sources & References
Primary references used for this content
2025 Cost-of-Living Adjustments for Retirement Plans
2025 elective deferral, §415(c), catch-up figures
View on irs.gov
2026 Cost-of-Living Adjustments for Retirement Plans
2026 limits including super catch-up (ages 60-63)
View on irs.gov
Retirement Plans for Small Business (SEP, SIMPLE, Qualified)
Two-hat math and SEP comparison
View on irs.gov
✓3 primary sources; links re-checked on a weekly rotation by the source watcher
Disclaimer: This calculator provides estimates for educational purposes only. Not tax, legal, or financial advice. Results may vary based on your specific circumstances. Consult a qualified CPA or tax professional for personalized guidance.