See:
One Participant 401k Plans | Internal Revenue Service (irs.gov)
The business owner wears two hats in a 401(k) plan: employee and employer. Contributions can be made to the plan in both capacities. The owner can contribute both:
- Elective deferrals up to 100% of compensation (“earned income” in the case of a self-employed individual) up to the annual contribution limit:
- $19,500 in 2020 and 2021, or $26,000 in 2020and 2021 if age 50 or over; plus
- Employer nonelective contributions up to:
- 25% of compensation as defined by the plan.
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