Yes, as long as self-employment earnings are reported to you on Schedule K-1 Line 14a, you may contribute to a Solo 401K Plan. These contributions are considered Employee Benefits and entered as a Business Expense in TurboTax Business.
A Solo 401(k) plan covers a business owner with no employees, or that person and his or her spouse. These plans have the same rules and requirements as any other 401(k) plan. Unless one of your partners is your spouse, they would not qualify to participate.
Contribution limits in a one-participant 401(k) plan
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:
- $20,500 in 2022 ($19,500 in 2020 and 2021), or $27,000 in 2022 ($26,000 in 2020 and 2021) if age 50 or over; plus
- Employer nonelective contributions up to:
- 25% of compensation as defined by the plan, or
- for self-employed individuals, see discussion below
Total contributions to a participant’s account, not counting catch-up contributions for those age 50 and over, cannot exceed $61,000 for 2022 ($57,000 for 2020; $58,000 for 2021).
Additional info: One Participant 401k Plans | Internal Revenue Service
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