Select Page
Budgetboost.co is supported by its readers. If you click on or buy something via a link on this page, we may earn a commission.
Budgetboost.co is supported by its readers. If you click on or buy something via a link on this page, we may earn a commission.

5 Solo 401k Plan Reviews: Rules + Calculate Limits & Deadlines in 2019

Updated: October 2019
Follow us on: Pinterest

Table of Contents

Solo 401KSimple IRAs, SEP IRAs and Solo 401(k)s: Which One Should You Pick?

If you are no longer employed by someone outside your home and would like to have a 401(k) plan, you will be happy to know that there is an entire list of retirement plan choices open to you as either a self-employed independent contractor or the owner of a small business.

You will have the option of doing either a Simple IRA, a SEP IRA or a Solo 401(k) plan. The difference between these three options is listed below.

Simple IRAs

A Simple IRA is something that few people have heard of and differs from a 401(k) in several ways. One of the most significant differences of a Simple IRA is that this plan is targeted for employers who have less than 100 employees.

The cost of a Simple IRA is also significantly less than the time and effort required to maintain a standard 401(k). There are five main reasons you would want to shoot for a Simple IRA.

100 Percent Employee-Vested Contributions

With most 401(k) plans, you are required to work for your employer for a set number of years before you are vested. A vested employed can leave the employer and take the matching 401(k) contribution with they leave the company or organization. The time requirements can range anywhere from three to five years before the vesting schedule of a 401(k) has been satisfied.

Unlike a 401(k), however, a Simple IRA allows you to be 100 percent vested whenever your employer deposits the funding into your account. The ability to be fully vested immediately upon joining a company can be a huge deciding factor when deciding whether to choose a traditional 401(k) or a Simple IRA. Both you (and your employees, if you have any) will have the opportunity to enjoy immediate vesting of your contributions.

Employers Are Required to Match in a Simple IRA

Employers are required to match a contribution to your Simple IRA account each year. This contribution can be in the form of a match or a non-elective contribution. A matching contribution states that the employer must match at least what you invest, if not more. If you are matching three percent, your employer is required to match three percent as well. This three percent is the maximum percentage that an employer is required to match with a Simple IRA. The employer also has the option to reduce the matching figure to one percent for two years out of a five-year period.

This means that the employer will only match one percent for the first two years. The remaining three years require the employer to match the full three percent. The employer can also choose a “non-elective contribution” instead of matching your percentage. A non-elective contribution means that the employer will contribute two percent of your salary, no matter what percentage you are contributing.

Solo 401K

Employees are in Control of Their Investments

With the vast majority of 401(k) plans, you are limited to the investment options that are provided by your employers. With a Simple IRA, you have more options. A Simple IRA is a self-employed retirement plan that give you the latitude to choose exactly where you want to invest your money. Whether you want to purchase individual stocks or mutual funds, ETFs or CDs, you have the ability to do whatever you feel is best. We talk about bank CD rates in another article. Simple IRAs and SEP IRAs both offer this latitude. Other benefits include the following:

1) With a Simple IRA, you have the ability to choose your investment trustee. AS an employer, you have the option to allow your employees to select the financial institution of their choice to hold the plan. This gives the employees grater freedom, as well as decreasing the administrative load of managing the entire plan for all your employees.

2) Participants in a Simple IRA are also able to participate in DIY investing, meaning that they can choose how the money is invested, where it is invested and how much risk they are willing to take.

100 Percent of Income can be Contributed to a Simple IRA

You can contribute up to $12,500 a year to a Simple IRA plan. If you are over 50 years of age, you are offered a “catch-up contribution” of $3,000. Keep in mind, however, that the maximum amount of money allowed to be contributed to a Simple IRA ($15,000) will always be less that the maximin contribution amount allowed in a 401(k) ($24,000). SEP IRAs and Solo 401(k)s are higher still with a cap of $54,000.

The Simple IRA contribution limit of $12,500 is more than double the contribution limit for traditional Roth IRAs. The same holds true for the “catch-up contribution” limit for those who are 50 years or more of age.

The 100 percent feature of a Simple IRA means that you can contribute as much as you want to the plan up to the maximum amount. As an example, if your employee earns $35,000, he or she can contribute the first $12,500 of their income (or $15,500 if they are 50 or over) to the plan. There is no percentage limit with a Simple IRA. The only contribution guidelines are the actual dollar mounts.

While it is true that you can contribute more of your income to other plans such as the SEP IRA or the Solo 401(k), you would need o have a relative high income from your business to be able to take advantage of these percentage-based retirement plans. If you are self-employed with an income of less than $100,000 a year, you might find that the Simple IRA is sufficient for your needs. You will not be required to file special reports with the IRS or be required to submit to certain auditing systems.

SEP IRA

The name SEP IRA stands for Simplified Employee Pension Individual Retirement Account. SEP IRAs work the same way as traditional IRAs but are a scaled-down version for either the self-employed or the employer with a handful of employees. SEPs work the same way as IRAs in regard to contributions, taxes, investment options and hardship withdrawals. However, an SEP allows a much greater percentage of your yearly income to the plan.

In some cases, you have the ability to contribute up to $60,000 of your net income. The contribution limit set by the IRS is 25 percent, but the formula used to calculate this 25 percent balances out to be around 20 percent on average. With the SEP IRA, you are able to add employees to the plan as you hire them. However, each employee will be required to open his or her individual account.

Solo 401K

Solo 401(k) Plans

The Solo 401(k) plan is a recently created retirement plan for the self-employed. The Solo 401(k) was created in 2001 by the Economic Growth and Tax Reconciliation Act and is similar in many ways to a traditional 401(k) plan offered by large businesses or corporations. The Solo 401(k) plan differs from the traditional 401(k) plan by its emphasis on self-employed individuals and requires less administrative upkeep than that required for the corporate version.

Solo 401(k) are only available to individual business owners and their spouses. Part-time workers who work less than 1,000 hours a year are also excluded. If you have full-time employees, you will need to choose a different self-employed retirement plan.

As with a Keogh Plan, single-participant 401(k)s must be established by December 31 of the applying year. You will also be required to submit Form 5500 annually with your plan reaches $250,000 in assets. You have the ability to make contributions through the tax filing deadline and any extensions.

 How Solo 401(k)s Work

Solo 401(k)s allow for a combination of standard 4019(k) contribution maximums followed with a discretionary employer match of up to 25 percent of the yearly net earnings. Any “catch-up contributions” are also allowed.

Depending on your income, you will have the ability to stash away more of your income than you would with an SEP IRA. Like the SEP IRA, Solo 401(k) plan owners can contribute up to 25 percent of their yearly earnings. However, unlike SEP IRA holders, the Solo 401(k) holder has the option to contribute the first $18,000 as a tax-exempt contribution. Unless you earn enough to contribute the full $53,000 permitted by the SEP IRA, you will be able to save more for retirement with an individual 401(k) plan.

Establishing a Solo 401(k) Plan

Setting up a Solo 401(k) is easy to do for a sole proprietor and owners of S or C corporations or partnerships. Unlike traditional 401(k)s, a Solo 401(k) does not require any discrimination tests or the filing of Form 5500. A Form 5500 is a form that larger 401(k) plans are required to file with the IRS in order to remain compliant. A Solo 401(k) holder does not have to fill out this form until the plan reaches $250,000.

Although the Solo 401(k) plan is called “solo” (and Han Solo would die of joy if he knew the plan bears his name), you can also set it up to accommodate your spouse or your bone fide partner as well. Any employee who works fewer than 1,000 hours a year will be exempt from this plan. If you have employees who work more than these hours or are planning to hire more employees to be on your payroll, you will need to consider a different plan altogether.

As the holder of a Solo 401(k), you have two different contribution options: elective and non-elective. As an elective contributor, you have the option of whether or not you want to contribute any of your income as the “employee” of your sole proprietorship. A non-elective option means that you are required to contribute.

Vesting Schedule for Solo 401(k)s

Unlike traditional 401(k) plans, you will not need to follow a vesting schedule for a Solo 401(k). When you or your business contributes to your account, you are immediately 100-percent vested. As with the traditional 401(k) contribution limits, you can set aside up to $18,000 of your pre-tax income for elective contributions. If you are over age of 50, you have the option of setting aside an additional $6,000 for a total of $24,000.

In addition to the $18,000, the employer can also offer a non-elective profit-sharing contribution of up to 25 percent of your income. This figure would be based on your W-2 form. Total yearly contributions cannot be greater than $53,000 per year. In other words, if you reach your deduction limits of $18, 000 or $24,000, the business can contribute a maximum of $53,000 to your account.

Solo 401(k) plants are required to be established by the end of the business tax year in order to make a contribution for the year the plan is opened. Because a Solo 401(k) plan is for you alone (and your spouse, if applicable), your administrative requirements are extremely low. If you decide to maintain a Solo 401(k) along with a traditional 401(k) with another employer, the total salary deferral you are able to make between all your 401(k)s combined will be around $18,000.

Locating a Provider for a Solo 401(k) Plan

Looking for a Solo 401(k) provider can be tricky, but it is not impossible. There are many options and nuances that you should be on the lookout for when shopping around for a 401(k). Although there are plenty of providers out there who offer simple generic plans for a low cost, you might be able to benefit from a custom 401(k) plan for your business. Once completed, you can then take the plan to a brokerage for finalizing. There are several major points you need to consider when choosing a Solo 401(k) provider.

  • Does the provider offer Roth and traditional contributions?
  • Does the provider allow loans against the balance?
  • How much does it cost to maintain the plan?
  • What is the cost of investing within the plan itself?
  • Are you allowed to do rollovers into and out of the plan penalty-free?
  • What type of investment options are you allowed to use within the plan?

There are five major firms that offer low-cost Solo 401(k) plans. These prototype plans may work for those whose business operations are relatively simple and low-key.

Solo 401K

Fidelity Solo 401(k)

Fidelity offers a wide variety of products at extremely affordable prices. However, the firm does not offer a complete Solo 401(k) with a Roth contribution option or 401(k) loans. According to one of their representatives, the absence of these options helps save costs on maintaining the plan. Fidelity does offer a complete range of investment options including mutual funds, stocks, bonds and commission-free ETFs.

Fidelity also allows rollovers into the plan, which a great way to do a backdoor Roth IRA. The Fidelity Solo 401(k) is very inexpensive and does not have any setup fees or annual maintenance costs. With a standard $4.95 commission on trading within the Solo 401(k) and the extremely low-cost ETFs you can trade commission-free, Fidelity is one of the best low-cost investing brokers for those who are interested in long-term investing.

Vanguard Solo 401(k)

The Vanguard name has become synonymous to extremely low fees. As such, they are also a very lost-cost provider. As in many cases, you get what you pay for. While Vanguard offers traditional and Roth IRA options for their Solo 401(k) plants, they do not permit rollovers or loans from the plan. Vanguard also does not permit participants in their Solo 401(k)s to invest in anything but Vanguard mutual funds.

Fees for Vanguard are also higher than would be expected for a company that offers so little. Although there is no fee for setup or maintenance, you are charged $20 a year for each fund you hold inside your 401(k) plan. As an example, if you have seven funds inside your 401(k), you will be paying Vanguard $140 a year. You can have this fee waived if you are either Flagship Select or Voyager Select, meaning you have $50,000 or more in assets with Vanguard.

Charles Schwab Solo 401(k)

Schwab is another low-cost brokerage that provides free prototype Solo 401(k) plans. Unlike Vanguard, Schwab does not offer a Roth IRA option with their plan. Schwab also does not allow you to take out loans with their plan. While you are allowed to perform a rollover of a traditional 401(k) into your Schwab Solo 401(k), you are not allowed to do a rollover with an IRA.

You do have more latitude with your investment options with Schwab. These include Vanguard mutual funds and commission-free ETFs. Schwab does not charge any fees to open a Solo 401(k) or to maintain it. Traditional Schwab pricing of $4.95 per trade and $0 on Schwab funds and ETFs apply.

E-Trade Solo 401(k)

E-Trade is one of the better low-cost Solo 401(k) options on the market today. E-Trade is a little pricier than some of its counterparts, but it also offers more benefits. Both traditional and Roth IRAs are supported, along with loans under their plan. You are allowed to perform rollovers of any kind into the plan and can set up your plan to permit in-service rollovers out of the plan.

This option is rare even for traditional 401(k) plans. E-Trade is also the only low-cost plan that allows you to modify the prototype to permit in-service distributions as an add-on provision. This option allows you to do a backdoor Roth IRA as well. E-Trade does not charge any set-up fees. A standard $6.95 commission is charged for each trade at this time. However, E-Trade does offer multiple no-fee mutual funds.

TD Ameritrade Solo 401(k)

TD Ameritrade has a free prototype plan that is a bit more complicated to decipher than others. The Solo 401(k) plan offered by TD Ameritrade allows for both traditional and Roth IRA contributions. Loans are also permitted, although it is unknown what types of rollover options they allow into and out of their plan.

According to their plan document, rollovers are only permitted from 401(a), 401(k), 403(b), 408 and 457(b) accounts at this time. TD Ameritrade offers a wide selection of investment options within their 401(k) plan including Vanguard ETFs and others at no cost. You are not required to pay any set-up fees or account maintenance fees. The standard commission fee is $6.95.

Because each one of these firms listed has its pros and cons, you might want to consider creating your own plan using a third-party service to get the best of all worlds. Although you will be required to pay for these services, it can be well worth it to get the best plan for your situation. Keep in mind that your third-party Solo 401(k) can be held at any firm of your choice. Some online firms include Ubiquity, My Solo 401(k) and Accuplan. You can also look around in your area if you want to support a local firm to create your 401(k) plan documentation.

FAQ

A solo 401K is a smart and effective way for small business owners or self-employed individuals to save money for retirement even if they cannot do so through a traditional job. This FAQ’s page is dedicated to help answer any and all questions you may have about solo 401K plans.

General Solo 401K FAQ

In this section you will find general solo 401K frequently asked questions ranging from what a solo 401K is to rollover questions

Your Title Goes Here

Your content goes here. Edit or remove this text inline or in the module Content settings. You can also style every aspect of this content in the module Design settings and even apply custom CSS to this text in the module Advanced settings.

What is a Solo 401K?

A Solo 401K is an individual 401K that is designed for a business owner who currently has no employees. If you have employees, you cannot contribute to a Solo 401K.

How to set up a Solo 401K?

To set up a Solo 401K, you first need to understand Solo 401K eligibility requirements, find a Solo 401K provider, create plan documents and then make contributions to your Solo 401K.

How to start a Solo 401K?

To start a Solo 401K, it will differ for each Solo 401K provider. However, most will require for you to meet eligibility requirements, to sign paperwork and then begin making contributions into your Solo 401K account.

How to open a Solo 401K?

In order to open a Solo 401K account, you first must find a provider and meet their eligibility requirements. Each provider will have their own requirements that you must meet, so be sure to contact the site support directly before opening an account.

Who can open a Solo 401K?

A Solo 401K can only be opened by business owners who currently do not employ any employees. As long as you show proof of not hiring any employees full-time, you can open a Solo 401K account.

Can you have a Solo 401K and an IRA?

Yes. If you are eligible and have compensation, you may contribute it to an IRA. However, having a Solo 401K plan can affect the ability to deduct a traditional IRA contribution.

Can I have a SEP and a Solo 401K?

Yes. You can make regular contributions into a Solo 401K account and a SEP IRA. Keep in mind there is generally no advantage for a business to have both of these accounts active at the same time.

How to set up a self-directed Solo 401K?

Setting up a self-directed a Solo 401K follows the same rules and requirements as a traditional 401K, except you have the flexibility to invest in anything you wish, as long as it is completely legal. This type of plan allows for pre-tax savings with automated paycheck deductions.

What is the deadline for setting up a Solo 401K?

The deadline for setting up a Solo 401K as of 2018, is December 31st or it must be set up by the fiscal year end of your business. Contributions can be made up until April 15th or the tax filing deadline for your business.

Can I have two Solo 401K plans?

Yes, you can have two Solo 401K plans. According to the IRS Publication 560, under the Retirement Plans for Small Businesses Pursuant, you can have more than one qualified Solo 401K plan, but all of the contributions to the plans must not be more than the overall limits.

How to open a Solo roth 401K?

A Solo roth 401K is a plan for retirement savings. This type of plan is typically set up through an employer as long as you work full-time. This type of plan is funded with money after taxes.

Who is eligible for a Solo 401K?

A Solo 401K is perfect for any person who is a sole proprietor, consultant or independent contractor. Those interested must either have self-employment activity on their earnings and the absence of any employees.

Can an S Corp have a Solo 401K?

As a Solo 401K is a 401K plan for owner only businesses, the IRS recognizes an S Corp and allows an S Corp to sponsor a Solo 401K. Each own must own more than 2% of the outstanding stock of the S Corp.

Can I have a Solo 401K and a regular 401K?

Yes. You can have both a Solo 401K and a regular 401K. You can have both plans as long as you don’t contribute more than the allowed yearly limit of $18,000 if under the age of 50, 25% compensation for S-corp, C-corp, partnerships or multi-member LLC’s or $24,000 for those over the age of 50.

How many participants can you have in a Solo 401K?

You can only have one participant in a Solo 401K plan: yourself. You cannot add or have other people contribute into your own Solo 401K plan. However, there are spousal plans or other plans that you can choose from if you want more than one participant.

What can I invest in with a Solo 401K?

With a self-directed Solo 401K plan, self-employed individuals can make investments in real estate, metals, various tax liens, stocks, mutual funds, mortgages/deeds, commercial paper, mobile homes, unsecured notes, foreclosures or developed land.

Who is the best Solo 401K?

The best Solo 401K provider to date is Vanguard with a low cost and easy to set up Solo 401K. Next is Fidelity, E-Trade, TD Ameritrade and MySolo401Kfinancial. Each has their own benefits so, make sure to do research on the provider ahead of time.

How to open a Solo 401K at TD Ameritrade?

When opening a Solo 401K at TD Ameritrade, it is important to remember you are opening a 401K plan and trust investment only account. Simply fill out the correct application on the TD-Ameritrade website and transfer funds into the account once opened.

Can you open a Solo 401K through Vanguard?

Yes. You can open a Solo 401K account through Vanguard and it is perhaps the best option when it comes to Solo 401K providers. Visit the Vanguard website here to see if you qualify for a Solo 401K account.

Is a Solo 401K considered a pension plan?

No. A Solo 401K plan allows you to choose your own retirement investments without guarantee of minimum or maximum benefits. A pension plan guarantees a given amount in monthly income once you retire.

When is the plan year for a Solo 401K?

The current plan year ends for a Solo 401K on December 31st. However, if you open a plan by this date, you can wait until the next year to make annual contributions into the 401K account.

Does Fidelity require EIN for Solo 401K?

In order to have and contribute to a Solo 401K, you must first obtain an EIN or Employee Identification Number. You can retrieve this number from the IRS. It is like a social security number strictly for a business.

Can my bank set up a Solo 401K?

No. Most banks cannot set up a Solo 401K because most banks are ignorant of self-directed Solo 401K’s. However, you can open your own bank account just for your Solo 401K trust.

Does a Solo 401K expire?

No, a Solo 401K does not expire. However, there are penalties if you cut your 401K account in terms of income tax on total amount distributions, moving the funds to an IRA rollover account or moving into a new Solo 401K plan.

Does Betterment have a Solo 401K?

Yes. Betterment offers a Solo 401K that is similar to a traditional 401K. The plan Betterment offers is known as a One-Participant plan that works similar to a traditional Solo 401K plan.

Can a Solo 401K own a brokerage account?

It depends on the provider. Some providers offer checkbook control for those what want to have the option to invest in equities while also have control over their retirement funds.

Who is the best Solo 401K provider?

The best Solo 401K provider on the market today is Vanguard. They allow business owners and self-employed individuals to set up a Solo 401K with a low cost and incredibly easy set up features.

Solo 401K Financial FAQ

This section is dedicated to frequently asked questions ranging from how much you can contribute to a Solo 401K to important tax deduction information.

Your Title Goes Here

Your content goes here. Edit or remove this text inline or in the module Content settings. You can also style every aspect of this content in the module Design settings and even apply custom CSS to this text in the module Advanced settings.

When do I have to fund my Solo 401K?

You first must establish your Solo 401K by December 31st each year. Once set up, you can make regular contributions as you get paid and before the contribution deadline of April 17th, around the time taxes are due.

Is a Solo 401K tax deductible?

It depends. Currently Solo 401K contributions are not tax deductible as a business expense.  However, you can still take a tax deduction on annual contributions of up to $55,000 or deductions of expenses that are made in connection with the trade of the business.

How much can I put in a Solo 401K?

The most amount that you can put into a Solo 401K as of 2018, is $55,000 for the year, as long as you are under the age of 50. If you are over the age of 50, you can add an extra $6,000 per year for catch up, equaling to $61,000 in contributions per year.

Can I rollover a Solo 401K to an IRA?

In order to transfer some of the funds from your 401K to an IRA, the type of funds you can rollover will be dependent on the source of the initial funds.

How to report a Solo 401K on Schedule C?

In order to report a Solo 401K on schedule C, you must list your net income for the year on Schedule C for your tax form. Then list your contributions for your 401K on the 28th line of the tax form.

Where to enter a Solo 401K on a tax return?

Where to enter a Solo 401K on a tax return is dependent on the type of entity that maintains the 401K.  A partnership must report on a Schedule K-1, a sole proprietor must report on a Schedule C and LLC’s must report on either Schedule K-1 or Schedule C.

How much do I need to start a Solo 401K?

Most Solo 401K plans only require the yearly contributions after a plan has been started. However, most providers will charge a custody fee, mutual fund expenses or commissions when opening an account with them.

How much does it cost to manage a Solo 401K?

Most small businesses or self-employed individuals will have to pay a one-time setup fee of $150 just to open a Solo 401K account with an administrative cost of $25 a month for maintaining the account.

How to change the plan year for 5500 Solo 401K?

The best way to change the plan year for 5500 Solo 401K is to either change the plan year manually when filed with the IRS, or to do so electronically via the IRS official website when you file.

Solo 401K Contribution FAQ

In this section, you will find answers to frequently asked questions regarding regular contributions to personal Solo 401K plans.

Your Title Goes Here

Your content goes here. Edit or remove this text inline or in the module Content settings. You can also style every aspect of this content in the module Design settings and even apply custom CSS to this text in the module Advanced settings.

Where to deduct Solo 401K contribution?

To deduct a Solo 401K contribution, it ultimately depends on the lender maintaining the 401K plan. Any contributions made to your Solo 401K plan are deductible pursuant to IRC Sec. 404. If you have any questions, make sure to ask prior to completing your taxes for the year.

How to contribute to a Solo 401K?

To contribute to your Solo 401K, you must contribute into your personal account using the income you make from your business or self-employment. As of 2018, you can contribute up to $55,000 for the year.

What is the maximum Solo 401K contribution for 2015?

The maximum contribution for a Solo 401K account for 2015 allows owners to contribute up to $53,000 per year. For this contribution, a Solo 401K must have been adopted by the business by December 31st, 2015.

How to calculate a Solo 401K contribution?

There are two primary ways to calculate a Solo 401K contribution: employee contributions and employer contributions.

  • Employee contributions: you can defer up to 100% of your earned income up to as much as $18,000 under the age of 50. Age 50 and above contribution can add an additional $6,000 per year.
    Employer contributions: you can make profit sharing contributions to your Solo 401K plan, but are limited to 35% of your compensation. Total Solo 401K contributions cannot exceed more than $53,000 for the year under the age of 50 or $59,000 for individuals over the age of 50.

Where to report Solo 401K contributions?

To report Solo 401K contributions on your tax returns, you should add the contributions in the income and expenses section under the title self-employment retirement plans. If you cannot find that section, look for a section that is titled, “List all income.”

Can my spouse contribute to my Solo 401K?

No. Only you can contribute to your own Solo 401K based upon your net self-employment income, not your spouse’s income. You can qualify for a spousal IRA contribution based on your spouse’s income if you wish.

Can I contribute to both employer 401K and Solo 401K?

Yes. You can contribute to more than one 401K plan at the same time. Doing so will require you to aggregate funds into both plans while remaining under the maximum contribution limit of each.

How to calculate a Solo 401K contribution limit?

If you are an employee, you can add up to 100% of your earned income into your Solo 401K plan. If you are over age of 50 as of 2018, you can contribute up to $24,000 a year into your plan.

How to fund a Solo 401K?

Those who own a Solo 401K plan can fund their plan by either contributing 100% of their income for the year or by contributing half of your own self-employment tax.

Can a partnership make a Solo 401K contribution?

Yes. As long as a partnership qualifies for a Solo 401K by showing self-earned income and having no employees, a partnership can make a Solo 401K contribution. A partnership must also make sure not to contribute more than the contribution limit for the year.

Can you contribute to a Solo 401K if sole proprietor?

If you have a Solo 401K, you can contribute to it as a sole proprietor. You are only able to do so as long as you don’t contribute more than the maximum amount for the year.

What is the limit for company contributions to a Solo 401K?

A business owner for a company can make contributions of two types to a Solo 401K: elective deferral and profit sharing. The maximum contribution for an elective deferral is no more than $18,000 or $24,000 if you are under the age of 50. For profit sharing, the maximum contribution must not exceed $55,000

What is the deadline for a Solo 401K contribution?

According to the Solo 401K contribution deadline rules, those with a plan must elect to contribute by December 31st. However, those can also make a contribution up until the personal tax filing deadline.

What is the max contribution to Solo 401K including employer?

As of 2018, the max contribution to a Solo 401K including the employer is maximum $55,000. As of 2019, the maximum contribution including the employer is no more than $56,000 for the year.

Rachel Carey

Rachel Carey

Financial Guru

Rachel is dedicated to helping individuals and families boost their budgets so they can enjoy the lifestyle they deserve. Rachel graduated with a degree in Family and Consumer Sciences. She’s a prolific finance writer, producing tons of articles on different aspects of personal and family budget management.