What is a Solo 401(k)?

A Solo 401(k) - also  called a One-Participant 401(k) - is a traditional 401(k) for self-employed individuals and business owners with no full-time employees (though you can include your spouse).

For 2023, you can make employee elective deferral contributions of up to:

• $22,500 if you're 49 or younger
• $30,000 if you’re 50 or older

The elective deferral total includes all 401(k) plans you’re enrolled in. If you contributed to a 401(k) for another job, your Solo 401(k) employee limit is the above minus your other 401(k) contributions. The deadline for employee contributions to a Solo 401(k) is December 31 of the tax year.

In addition to employee contributions, you can make nonelective company contributions of up to 25% of compensation as defined by your plan. This compensation doesn’t include retirement plan contributions or the self-employment tax, which are deducted from your income. TurboTax will make these calculations for you (or tell you if you contributed too much to your Solo 401(k)). 

Total plan contributions, excluding catch-up contributions for those age 50 and over, can't exceed $66,000 for 2023.

The deadline for company contributions is generally the tax filing deadline, which is April 15, 2024.