understanding solo 401k employee contribution limits

smroyal96 — Wed, 11 Feb 2026 09:07:35 GMT

I am self employed and over 50 and I make contributions to a solo 401k. My gross receipts were lower this year than normal and I want to make sure I didn't over contribute. I made the max allowed salary deferral (or employee) contribution of $30,000 to my roth solo 401k because the IRS page on one participant 401k plans says "The owner can contribute Elective deferrals up to 100% of compensation (“earned income” in the case of a self-employed individual) up to the annual contribution limit". My question is - what is the definition of compensation? Is it gross receipts? Or is it net profit from my schedule C? - Or is it Schedule C net profit minus half of the self employment tax? In my case the first two are over $30K but the third is not, so it makes a difference.

And does the fact that it is a roth contribution rather than a pre-tax contribution make a difference? When I entered my $30k contribution as a roth contribution in turbo tax, I didn't receive an error, but when I entered it as a pre-tax contribution, turbotax told me I had over contributed by over $600

Re: understanding solo 401k employee contribution limits

DavidD66 — Fri, 05 Apr 2024 00:00:05 GMT

For your elective deferral you can contribute up to 100% of your net income from self-employment, which is Schedule C profit less one half of self-employment tax. It shouldn't make a difference whether you are making a Roth contribution or a tax deductible contribution, so I can't explain why the program is telling you that one is an over contribution if the other is not.

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understanding solo 401k employee contribution limits

Re: understanding solo 401k employee contribution limits