Accounts · Some talk

Solo 401k

Also called individual 401k · self employed 401k · one participant 401k · solo 401(k)

Community talk. May contain inaccuracies. Not financial, tax, legal, or investment advice. No return or outcome is promised.

A solo 401(k) is a U.S. retirement plan for an owner-only business, potentially including a working spouse. It lets the owner save as both employee and employer, but the owner also takes responsibility for the plan’s paperwork.

IRS · current guidance

How an owner-only retirement plan works

Business earnings fund two different contributions. An employee deferral is money the owner chooses to put aside from pay. An employer contribution comes from the business. Both need qualifying earnings; investment income alone does not create contribution room. A sole proprietor with no net earnings cannot contribute for themselves that year.

IRS Publication 560 · 2025

2026 limits depend on earnings. Employee deferrals: $24,500. Combined additions: the lesser of $72,000 or eligible compensation, excluding catch-up contributions.

IRS · 2026 limits

Catch-up room depends on age and the plan. In 2026, permitted catch-ups are $8,000 at age 50+, or $11,250 at ages 60–63, with sufficient compensation.

IRS · 2026 catch-ups

Employer math changes with the business structure. A corporation generally bases its contribution on eligible wages. For a sole proprietor, the 25% plan rate becomes 20% of profit after the half-self-employment-tax adjustment. The IRS worksheet applies further earnings and contribution limits; 20% of gross revenue is not the calculation.

IRS Publication 560 · 2025

Opening the account also means adopting a plan. The process includes an account application, adoption agreement defining the plan, and retained plan documents. Contributions need their tax year, employee/employer role and traditional/Roth treatment recorded. Money transferred into the account also needs an investment choice; opening it does not choose investments.

Charles Schwab · current plan instructions

Election, setup and funding have different deadlines. An existing owner plan generally needs the written deferral election by business year-end, with owner contributions deposited by the business tax-return deadline including extensions. A new sole-proprietor plan adopted after year-end has a special first-year deferral window: adoption and funding by the filing deadline without extensions. Late corporate/partnership setup allows employer contributions, not retroactive employee deferrals.

Fidelity · current deadline rules

Why owners consider it

Employee deferrals can add room beyond an employer-only contribution. That extra role is why owners compare a solo 401(k) with a SEP IRA. Someone also working a day job shares the personal deferral limit across applicable plans; a solo account does not create a second employee allowance. Business-side contribution room may still remain.

IRS · one-participant plans

Traditional and Roth treatment serve different tax purposes. Traditional contributions generally offer a current deduction and taxable withdrawals later. Roth contributions use after-tax dollars; qualifying withdrawals are tax-free. That choice concerns when taxes are paid, not a guaranteed investment result.

Charles Schwab · current tax treatment

Good to know

Provider features and costs vary. Schwab currently charges no opening or maintenance fee, while investment expenses and other transaction charges may apply. It allows direct deposits for salary deferrals; employer contributions use check, wire or eligible internal transfer. Administration services can carry separate costs.

Charles Schwab · current pricing and funding

Retirement money has withdrawal restrictions. The plan requires a permitted distribution event. Traditional withdrawals are taxable, with possible penalties before 59½. Fidelity’s standard plan excludes loans, in-plan Roth conversions and Roth employer contributions. A Roth employee account alone does not establish a mega-backdoor route.

Fidelity · current plan features

Some 2026 catch-ups must be Roth. The wage test concerns more than $150,000 of 2025 wages from the plan sponsor. Self-employment profit alone is not that wage test; business owners paid W-2 wages need to distinguish the two.

Fidelity · 2026 Roth catch-up rule

Hiring eligible workers changes the arrangement. An owner-only plan cannot simply ignore eligible employees, including qualifying part-time workers. Coverage and testing requirements can change. A spouse must actually work for compensation to participate; marriage alone is insufficient.

IRS · one-participant plans

Annual reporting and closing the plan need attention. The latest inspected Form 5500-EZ instructions, for 2025, require filing when combined employer one-participant plan assets exceed $250,000. A final-year return is required even below that threshold. Use the applicable year’s instructions rather than assuming closing a provider login closes the plan.

IRS Form 5500-EZ · 2025 instructions

From community discussion

A contractor chose contribution room despite extra reporting. A 31-year-old earning about $140,000 wanted to save $30,000–$40,000 yearly. A spouse’s raise had prompted questions about income eligibility for direct Roth IRA contributions. They chose the solo plan over a SEP while asking about backdoor Roths. Replies flagged a $69,000 example as a 2024 cap; the household’s choice does not establish everyone’s eligibility.

Community · Reddit

Profit records and deadlines became the owner’s HR job. Owners described leaving W-2 work, comparing SEP plans, missing setup deadlines, and keeping books clear enough for a tax preparer to calculate contributions. The provider login and profit records were recurring work; hiring prompted another plan review.

Community

Paperwork felt burdensome for one owner and easy for another. An S-corp owner reported rejected paperwork and mailed-check frustration at Schwab. They quoted a competing service at $500 setup, $80 monthly and 0.6% annually, without confirming a switch. A reply described roughly five-minute contributions through chat; another reported a smooth Fidelity experience. The quote is one reported offer, not current public pricing.

Community · Reddit

A Roth label did not deliver the desired employer feature. A poster had already used the employee allowance at a day job and wanted Roth employer contributions. Fidelity’s representative said its plan accepted only employee Roth deferrals. Replies disagreed about law versus provider policy, illustrating why Roth, loans and after-tax conversion features need separate checks.

Community · Reddit

A forum shortcut overstated the employer calculation. One discussion record used $140,000 × 20% = $28,000 plus a $23,500 employee deferral. That omits the self-employment-tax adjustment, and the deferral figure belongs to 2025. The removed reply cannot be freshly inspected; its numbers remain an example of why year and earnings basis matter.

Community

References for this topic

Sources and context

Tax consequences for a single member LLC dissolved 2 years ago with solo 401k closed this year ↗
id
money-wave-solo-talk — Tax consequences for a single member LLC dissolved 2 years ago with solo 401k closed this year
role
Community discussion
accessed On
2026-09-23
locator
random8_7 description of dissolved business, retirement assets and later plan closure.
scope
The business ending and the retirement plan closing were different events in the poster’s account, leaving reporting confusion. No individual filing determination adopted.
limitations
Selected self-reported public posts and replies, not verified outcomes, a representative sample, a prevalence estimate, or financial/legal proof. No private account material or linked financial screenshots accessed.
One-participant 401(k) plans ↗
id
money-wave-solo-rule — One-participant 401(k) plans
role
Official context
accessed On
2026-09-23
locator
Contribution limits and testing sections, including $250,000 or more Form 5500-EZ discussion.
scope
A business owner acts as employee and employer; employee elective-deferral limits are per person across plans; earned-income calculations and eligible employees matter.
limitations
Primary context for the named narrow claim; does not determine an individual account, eligibility or outcome.
One-Participant 401(k) Plans ↗
id
money-guide-solo-401k-one-participant — One-Participant 401(k) Plans
platform
IRS
role
Official context
accessed On
2026-09-24
locator
One-participant 401(k) plans, contribution limits, self-employed computation, and testing
scope
A solo 401(k) is a traditional 401(k) for an owner with no employees, or the owner and spouse. The owner contributes as employee and employer. Earned income is net earnings after half of self-employment tax and contributions for yourself. Hiring employees removes the no-testing advantage. Form 5500-EZ is generally required at $250,000 or more in assets at year-end.
limitations
The page does not attach a plan year to the $250,000 filing figure, and it points to Publication 560 for the actual rate worksheet rather than printing the finished dollar contribution.
slugs
- solo-401k
Retirement topics - 401(k) and profit-sharing plan contribution limits ↗
id
money-guide-solo-401k-2026-limits — Retirement topics - 401(k) and profit-sharing plan contribution limits
platform
IRS
role
Official context
accessed On
2026-09-24
locator
Deferral limits for 401(k) plans, catch-up contributions, overall limit on contributions, and compensation limit
scope
For 2026, elective deferrals are $24,500, the annual-additions limit is $72,000 not counting catch-up, catch-up is $8,000 or $11,250 at ages 60 to 63, and compensation counted is limited to $360,000. Elective deferrals are aggregated across plans.
limitations
The page's worked examples still use 2020 limits, including $19,500 and $57,000. Those example dollars are not the 2026 limits stated in the headings above them.
slugs
- solo-401k
- the-match
Publication 560 (2025), Retirement Plans for Small Business ↗
id
money-guide-solo-401k-pub-560 — Publication 560 (2025), Retirement Plans for Small Business
platform
IRS
role
Official context
accessed On
2026-09-24
locator
Set-up deadline, Contributions deadline, Self-employed individual, and the 2025 and 2026 limit reminders
scope
The plan must be set up by the last day of the year to deduct that year's contributions. Deductible contributions can be made by the return due date plus extensions, with a special elective-deferral timing sentence for a sole proprietor who adopts a new 401(k) after year-end. Contributions for yourself require net earnings from personal services. The publication states the same 2026 deferral and defined-contribution dollar limits.
limitations
The publication says it does not contain every rule. The footnote that solo plans are outside DOL deposit rules does not restate the tax deadlines.
slugs
- solo-401k
One-participant 401(k) plans ↗
id
money59-solo-401k-one-participant — One-participant 401(k) plans
platform
IRS
role
Official context
accessed On
2026-09-29
locator
Definition; contribution roles; earned income; employee coverage
scope
Owner/spouse eligibility, employee and employer contributions, shared personal deferral limit and employee eligibility.
limitations
General page; filing-threshold shorthand conflicts with precise 2025 instructions. No 2027 limits inferred.
slugs
- solo-401k
Publication 560 (2025): Retirement Plans for Small Business ↗
id
money59-solo-401k-p560 — Publication 560 (2025): Retirement Plans for Small Business
platform
IRS
role
Official context
accessed On
2026-09-29
locator
Chapter 4 setup/contributions; Chapter 5 rate table and worksheet
scope
25% plan rate converts to 20% reduced self-employment earnings; half-SE-tax adjustment; no-net-earnings limitation; first-year sole-proprietor exception.
limitations
Publication edition 2025 includes 2026 reminders, but worked worksheets use 2025 dollar caps. General adoption sentence is not a universal modern employer-contribution deadline.
slugs
- solo-401k
published Or Updated
2025
401(k) and profit-sharing contribution limits ↗
id
money59-solo-401k-limits — 401(k) and profit-sharing contribution limits
platform
IRS
role
Official context
accessed On
2026-09-29
locator
Deferral limits; overall limit; compensation limit
scope
2026 $24,500 deferral and $72,000 annual additions; lesser-of-compensation condition; $360,000 compensation cap.
limitations
2020 worked examples are historical. Card uses only concise 2026 numeric conditions.
slugs
- solo-401k
Retirement topics: Catch-up contributions ↗
id
money59-solo-401k-catchup — Retirement topics: Catch-up contributions
platform
IRS
role
Official context
accessed On
2026-09-29
locator
Age eligibility and 2026 amounts; Roth wage condition
scope
2026 $8,000 age-50 catch-up, $11,250 at ages 60–63, subject to plan and compensation; $150,000 prior sponsor wages.
limitations
General deposit wording is not substituted for owner-specific deadlines. Shared-page contribution is concise numbers.
slugs
- solo-401k
Individual 401(k) Plans: Traditional and Roth ↗
id
money59-solo-401k-schwab — Individual 401(k) Plans: Traditional and Roth
platform
Charles Schwab
role
Service rules
accessed On
2026-09-29
locator
Pricing; setup steps; contribution-transmittal and funding FAQ; tax treatment
scope
No opening/maintenance fee with other expenses possible; adoption/account documents; contribution designation; salary direct deposits versus employer check/wire/journal.
limitations
Commercial provider policy can change; not a recommendation. Current webpage directly contradicts blanket community claim that no electronic funding exists.
slugs
- solo-401k
Self-employed 401(k): Overview, contributions and maintenance ↗
id
money59-solo-401k-fidelity — Self-employed 401(k): Overview, contributions and maintenance
platform
Fidelity
role
Service rules
accessed On
2026-09-29
locator
Eligibility FAQ; establishment/contribution deadlines; optional features; withdrawals
scope
Current provider deadlines, Roth deferrals, excluded loans/in-plan conversions/Roth employer contributions; withdrawals; compensated-spouse requirement.
limitations
Commercial provider policy is not every solo plan's policy. Some broad employee/RMD wording is not used. No publication date verified.
slugs
- solo-401k
Instructions for Form 5500-EZ (2025) ↗
id
money59-solo-401k-5500 — Instructions for Form 5500-EZ (2025)
platform
IRS
role
Official context
accessed On
2026-09-29
locator
Page 2: Who Does Not Have To File; final-year exception
scope
2025 filing exemption at combined employer one-participant plan assets of $250,000 or less; final-year filing regardless of that exemption.
limitations
Search/page wrapper calls this 2024, but actual PDF body is 2025. No 2026 form edition asserted.
slugs
- solo-401k
published Or Updated
2025
SEP IRA vs. Solo 401k?? ↗
id
money59-solo-401k-reddit-sep — SEP IRA vs. Solo 401k??
platform
Reddit · r/personalfinance
role
Community discussion
accessed On
2026-09-29
locator
jaredhaley original post, choice follow-up, Berto_ and BouncyEgg replies
scope
31-year-old contractor: roughly $140k income, $30k–$40k goal, spouse's raise/direct Roth concern, SEP versus solo choice; replies flag $69k example as 2024.
limitations
Original body and visible replies opened directly. Exact original date not displayed; December 22, 2025 is preserved predecessor metadata, not freshly verified. Removed $28k/$23.5k reply not visible.
slugs
- solo-401k
Anyone happy with solo 401(k) provider? ↗
id
money59-solo-401k-reddit-friction — Anyone happy with solo 401(k) provider?
platform
Reddit · r/smallbusiness
role
Community discussion
accessed On
2026-09-29
locator
Wise-Hall-52 original; SirSquidlicker and Designer_Bite3869 replies
scope
S-corp owner's reported paperwork/rejected-deposit burden and Vestwell quote; opposite five-minute chat experience; positive Fidelity split-role report.
limitations
Direct visible bodies inspected; individual allegations, not audit findings. Poster tax interpretation disputed in replies. Search renders September 9, 2026; opened page shows only relative age, so exact date not independently established.
slugs
- solo-401k
No employer non-elective contribution for Roth Solo 401k? ↗
id
money59-solo-401k-reddit-features — No employer non-elective contribution for Roth Solo 401k?
platform
Reddit · r/fidelityinvestments
role
Community discussion
accessed On
2026-09-29
locator
Stonewalled9999 original; FidelityAllison response; CormacDoyle- and other replies
scope
Day-job deferral already exhausted; desired Roth employer money; provider representative says only employee Roth deferrals available; user confuses law and provider.
limitations
Firm-operated subreddit; representative promotes its services. Current Fidelity official page independently corroborates feature limitation. Only relative date in opened body.
slugs
- solo-401k
IRS retirement-plan contribution limit table ↗
id
quick-irs-retirement2026-total — IRS retirement-plan contribution limit table
role
Official context
accessed On
2026-09-12
scope
2026 defined-contribution overall annual additions limit is $72,000; employee elective-deferral base $24,500; qualifying catch-ups handled separately.
locator
Official page or official indexed text read on 2026-09-12.
limitations
This reference explains the named format or rule. Individual community accounts remain attributed in the notes.
IRS: participation in more than one retirement plan ↗
id
quick-irs-separate457 — IRS: participation in more than one retirement plan
role
Official context
accessed On
2026-09-12
scope
457(b) has a separate limit including employee and employer contributions; 401(k)/403(b) employee deferrals share the individual limit. Numeric examples on this page are older, so 2026 numbers come from the separate current IRS source.
locator
Official page or official indexed text read on 2026-09-12.
limitations
This reference explains the named format or rule. Individual community accounts remain attributed in the notes.
Rollovers of after-tax contributions in retirement plans ↗
id
money-official-after-tax-rollover — Rollovers of after-tax contributions in retirement plans
platform
Internal Revenue Service
role
Official context
accessed On
2026-09-07
locator
After-tax amounts and Roth IRA destination explanation.
scope
Checks limited after-tax-to-Roth meaning in mega-backdoor-roth opening.
limitations
Primary search text reviewed; not proof that a particular employer plan offers the necessary features, or that a transaction has no tax.

Keep this topic in view

Preserved original record

Earlier public profile and reader notes are preserved separately from the current article. They may contain superseded wording and are not newly checked material.

Read the full original profile

slug

solo-401k

name

Solo 401k

aliases

individual 401k
self employed 401k
one participant 401k
solo 401(k)

family

accounts

heat

mid

talk

Some talk

most Discussed

false

first Line

A solo 401(k) is a retirement plan for a business owner without eligible common-law employees, potentially also covering the owner’s spouse. The owner may contribute in employee and employer roles.

why Line

The account brings plan administration as well as contribution room: business income, other workplace deferrals, hiring and eventually closing the plan can all change the paperwork.

feel Words

solo 401k
individual 401k
self employed retirement

common Picture

lead
Two contribution roles use different rules
why
The owner’s employee deferral and employer contribution are not the same calculation. [community]
lead
2026 basic limits: $24,500 and $72,000
why
The first is the employee deferral ceiling; the second is overall additions, subject to earnings and plan conditions. [community]
lead
Other plans and employees matter
why
Employee deferrals are shared across applicable plans; hiring eligible workers can change the arrangement. [community]

watch For

Hiring eligible employees, contribution deadlines and plan administration can change the arrangement. A SEP IRA is a separate plan type with different rules. This is not advice.

what People Say

The job: retirement account for a one-person shop. [community]
r/personalfinance self-employed compares solo 401k vs SEP IRA. [community]
Mega backdoor sometimes exists here too if the plan allows — different card. [community]
Not advice. [community]

how People Run It

Confirm they are actually self-employed with profit. [community]
Open the plan before the deadline people always miss. [community]
Calculate the two contribution roles from the records: the owner’s employee deferral and business-side employer contribution use different limits and earnings calculations. [community]

amounts People Use

Employee deferral cap still exists. [community]
Employer contribution: the available amount depends on the business’s earnings calculation and applicable rules. It is separate from the employee deferral, even when one person makes both. [community]

how People Keep It

A provider login and a profit number. [community]

how It Feels

Like HR, but they are HR. [community]

how Long People Run It

While the shop is theirs. [community]

deep Dive

Separate the plan’s features: employee and employer contributions, Roth tax treatment and any permitted after-tax conversion route are different questions. A provider’s solo-plan label does not mean every optional feature is available. [community]

watch For Long

Recheck the plan after hiring: eligible employees can change whether the owner-only arrangement remains appropriate and what administration is required. [community]

related

the-match
roth-vs-traditional
mega-backdoor-roth
rsus-espp

research Pointer

house Pointers

play Pointer

—

sources

r/personalfinance solo 401k vs SEP
self-employed retirement threads

disclaimer

Community talk may be wrong. Not financial, tax, legal, or investment advice. No return or outcome is promised.

quick Answer History

field
commonPicture
rows
- lead
  Two hats
  why
  Employee deferral plus employer contribution stories. [community]
field
definition
rows
- A solo 401k is a one-participant retirement plan for self-employed people, with employee and employer contribution hats.
field
communityPicture
rows
- People leaving a W-2 compare it with a SEP IRA, miss deadlines, and keep books clean enough that a tax person can see the profit.
field
firstLine
rows
- A solo 401k is the self-employed cousin of the workplace plan — employee plus employer hats, then the usual match/Roth fights without HR.
field
whyLine
rows
- A solo 401k is the self-employed cousin of the workplace plan — employee plus employer hats, then the usual match/Roth fights without HR.
field
commonPicture
rows
- lead
  No employees (except maybe a spouse)
  why
  That is the ‘solo’. [community]
- lead
  Two contribution roles: employee and employer
  why
  The owner can contribute in both roles when eligible; the amounts use different rules. [community]
- lead
  A provider, not a spreadsheet IRA
  why
  Fidelity / similar individual 401k. [community]
- lead
  Profit first
  why
  Employer share needs a real net. [community]
- lead
  2026 employee deferral limit: $24,500 before catch-ups
  why
  This limit is shared with other 401(k)/403(b) employee deferrals. [community]
- lead
  2026 overall additions limit: $72,000, limited by eligible earnings
  why
  Employee and employer contributions share that total; qualifying catch-ups are separate. [community]
field
watchFor
rows
- Employees other than a spouse. Deadline traps. Not a SEP-only religion. Not advice.
field
howPeopleRunIt
rows
- They keep the match-of-one honest — books, not vibes. [community]
field
amountsPeopleUse
rows
- Employer percent-of-net is the second lever — tax person, current year. [community]
field
deepDive
rows
- The match / Roth vs Traditional / mega backdoor still apply as ideas. [community]
field
watchForLong
rows
- Hiring someone and keeping a solo plan on vibes. [community]

Read the preserved reader notes

definition

A solo 401(k) is a retirement plan for a business owner without eligible common-law employees, potentially also covering the owner’s spouse. The owner may contribute in employee and employer roles.

community Picture

The account brings plan administration as well as contribution room: business income, other workplace deferrals, hiring and eventually closing the plan can all change the paperwork.

additions

text
In one r/tax account, a planned business purchase fell through, the business entity was dissolved and the owner closed the retirement plan later. The poster was unsure which dates mattered for reporting. The useful distinction is that ending a business and completing a retirement plan’s closure are not automatically the same administrative event; the thread does not establish that person’s filing obligations.
sources
- money-wave-solo-talk — Tax consequences for a single member LLC dissolved 2 years ago with solo 401k closed this year
text
Official context: the IRS treats the owner as employee and employer, uses a special earned-income calculation for self-employed contributions, and counts employee elective deferrals across the person’s plans. It also explains that hiring eligible employees changes the one-participant arrangement. The headline annual maximum is a ceiling subject to those conditions, not an automatic contribution allowance for any side hustle.
sources
- money-wave-solo-rule — One-participant 401(k) plans

guide

what

A solo 401(k) is the IRS name, among others, for a one-participant 401(k). It is a traditional 401(k) that covers a business owner with no employees, or that owner and a spouse. It is not a new kind of plan. The same qualification rules apply. The owner contributes in two roles: elective deferrals as the employee, and nonelective contributions as the employer.
For 2026, the IRS contribution-limits page states an elective-deferral limit of $24,500. Annual additions, not counting catch-up contributions, cannot exceed the lesser of 100 percent of compensation or $72,000. Catch-up contributions, if the plan allows them and the person is 50 or older at year-end, are $8,000 in 2026, or $11,250 for ages 60, 61, 62, or 63. Compensation that can be counted is limited to $360,000 for 2026. The same page's narrative examples still use 2020 dollars, including $19,500 and $57,000. Those example dollars are not the 2026 caps.
A SEP IRA is a different plan on the IRS list of alternatives. Hiring changes this one. The one-participant page says the freedom from nondiscrimination testing disappears when common-law employees are hired. Eligible employees must be included, and their deferrals are tested unless the plan is a safe harbor or otherwise exempt from the test.

how

Confirm there is net earnings from the business. Publication 560 says a self-employed person can contribute for themselves only with net earnings from personal services in that business, not from investments. A net loss means no contribution for yourself that year, even if employees could be contributed for.
Adopt a written plan. Publication 560 (2025) says that to deduct contributions for a tax year, the plan must be set up by the last day of that year. Deductible contributions can be made up to the due date of the return, plus extensions. A separate sentence covers a sole proprietor who adopts a new 401(k) after the end of the tax year: elective deferrals must be paid in before the filing deadline, not counting extensions, to be treated as made by the end of the first plan year. A footnote says solo 401(k) plans are non-ERISA and do not use the Department of Labor deposit clock that can apply to other 401(k) salary deferrals. Match the adoption date to the sentence that fits it.
Calculate the two roles separately. The employee deferral can be as much as 100 percent of earned income, up to the annual deferral limit, and it is aggregated with elective deferrals made to other plans. The employer nonelective piece is up to 25 percent of compensation as the plan defines it. For a self-employed owner, earned income is net earnings after deducting one-half of self-employment tax and the contributions for yourself. Use the rate worksheet in Publication 560. Do not multiply the profit on the business return by 25 percent and stop.
Deposit only what the worksheet and the plan both allow. A normal pass is one sitting after the year's profit is known well enough to run the worksheet, then a transfer dated inside the deadline that applies. If plan assets are $250,000 or more at the end of the year, the one-participant page says Form 5500-EZ is generally required. That page does not print a plan year next to the $250,000 figure. A plan with fewer assets may be exempt. The provider's signup screen is not the worksheet.

understand

The two hats exist so one person can defer from earnings and also contribute as the employer, inside the annual-additions limit. Catch-up is not counted in that additions limit. The 2026 page states the additions cap as $72,000, or $80,000 including catch-up, or up to $83,250 for ages 60 to 63. The plan still has to permit the catch-up. The employer's deduction has its own 25 percent of compensation limit in Publication 560.
The common miss is deferring at a day job up to the personal limit and then deferring again in the solo plan. The one-participant page says the elective-deferral limit is per person, not per plan. The limits page makes that point with a 2020 example. Use the 2026 caps, not the example's $19,500 and $57,000. Another miss is skipping the earned-income worksheet because the contribution itself reduces the earnings the percentage is applied to.
Hiring eligible employees is the point where the owner-only arrangement stops matching the page. A SEP is a separate plan with its own rules, not a nickname for this one. Roth treatment, loans, and any after-tax feature exist only if the adopted plan includes them. The adoption date, Publication 560's worksheet, and the plan document still have to be checked. Nothing here promises a deduction larger than the earned income and the year's limits allow.

sources

money-guide-solo-401k-one-participant — One-Participant 401(k) Plans
money-guide-solo-401k-2026-limits — Retirement topics - 401(k) and profit-sharing plan contribution limits
money-guide-solo-401k-pub-560 — Publication 560 (2025), Retirement Plans for Small Business

summary Sources

quick-irs-retirement2026-total — IRS retirement-plan contribution limit table
quick-irs-separate457 — IRS: participation in more than one retirement plan
money-wave-solo-talk — Tax consequences for a single member LLC dissolved 2 years ago with solo 401k closed this year
money-wave-solo-rule — One-participant 401(k) plans

note References

field
howPeopleRunIt
index
2
text
Calculate the two contribution roles from the records: the owner’s employee deferral and business-side employer contribution use different limits and earnings calculations. [community]
sources
- money-wave-solo-rule — One-participant 401(k) plans
field
amountsPeopleUse
index
1
text
Employer contribution: the available amount depends on the business’s earnings calculation and applicable rules. It is separate from the employee deferral, even when one person makes both. [community]
sources
- money-wave-solo-rule — One-participant 401(k) plans
field
deepDive
index
0
text
Separate the plan’s features: employee and employer contributions, Roth tax treatment and any permitted after-tax conversion route are different questions. A provider’s solo-plan label does not mean every optional feature is available. [community]
sources
- money-wave-solo-rule — One-participant 401(k) plans
- money-official-after-tax-rollover — Rollovers of after-tax contributions in retirement plans
field
watchForLong
index
0
text
Recheck the plan after hiring: eligible employees can change whether the owner-only arrangement remains appropriate and what administration is required. [community]
sources
- money-wave-solo-rule — One-participant 401(k) plans

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End of Solo 401k