Solo 401(k)

Go Beyond a SEP IRA: See What a Solo 401(k) Can Really Do

Know exactly how much you can put away in your Solo 401(k) for 2025 as both the “employee” and the “employer” — using simple inputs and clear, visual results. Perfect for owner-operators with no common-law employees.

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Travis Tandy CEO & President of Tandy Consulting Inc

If you’ve only used a SEP IRA in the past, you might be leaving Solo 401(k) room on the table. This calculator lets you see how combining employee deferrals and employer profit sharing can boost your total retirement contributions for 2025.

  • See your maximum Solo 401(k) contributions in real dollars for 2025
  • Separate breakdown for employee deferral, employer profit sharing, and catch-up (age 50+)
  • Designed for owner-only businesses (sole props, single-member LLCs, and S-corps)
  • Helps you compare Solo 401(k) vs. SEP IRA potential at your income level
  • Built by Tandy Consulting for real-world tax and retirement planning conversations
S-Corp 401(k) Planning Guide + Calculator (2026) | Tandy Consulting Inc.

S-Corp 401(k) Planning Guide (2026)

A threshold-focused guide for S-corporation owners: understand W-2 wage targets, employee deferrals, and how employer match + profit-sharing work together--plus a calculator to stay under annual limits.

Tandy Consulting Inc.
Built for Guideline 401(k)

Key Limits & Planning Framework (2026)

Core idea: For S-corp owners (including ≥2% shareholders), retirement funding starts with W-2 wages. Distributions do not create 401(k) contribution capacity.

2026 Employee Deferral Limits (401(k))

  • Under 50: $24,500
  • Age 50--59: $24,500 + $8,000 catch-up = $32,500
  • Age 60--63: $24,500 + $11,250 enhanced catch-up = $35,750
Employee deferrals are combined across jobs
Catch-up is additional

Employer Contributions (S-Corp)

  • Employer match + employer profit-sharing are employer contributions.
  • Employer contributions are often limited to 25% of W-2 wages for S-corps (plan design and rules apply).
  • Most owner strategies combine: employee deferral + company match + profit-sharing.

Sweet Spot W-2 Strategy (Not Full-Max)

Full-max funding can push W-2 wages high. Many owners prefer a "sweet spot" that funds a strong retirement number while keeping payroll taxes and cash flow balanced.

  • Deferral-only sweet spot: W-2 ≈ $25k--$40k (max employee deferral by age band)
  • Most popular sweet spot: W-2 ≈ $75k--$140k (deferral + meaningful employer funding)
  • Full-max base cap target: W-2 ≈ $190k (supports max employer additions under a 25% cap)

Calculator-Style Sweet Spot Table (Reusable)

Assumes employee deferral is maxed first (up to $24,500), then employer funding is added. Your plan may use match and/or profit-sharing to reach these totals.

W-2 Wages Employee Deferral Employer Funding (up to 25%) Base Total Age 50--59 Add Age 60--63 Add

Solo vs. Group 401(k) (Owner View)

  • Solo-style: Works when there are no eligible employees beyond owner (and spouse, if applicable).
  • Group plan: Needed once eligible W-2 employees exist; often paired with safe harbor designs to reduce testing issues.
  • Practical path: Many owners start solo-style and transition to a group plan as staffing grows.
Guideline alignment: Guideline plans support employee deferrals, employer match, profit-sharing, and scalable designs--making it a strong fit for this W-2 + retirement optimization approach.
Educational info only. Plan rules and aggregation rules can vary based on ownership structure and plan design.

Quick Calculator (2026) -- S-Corporation (W-2)

Advanced: include second-job employer match/profit-sharing?
Turn on only if the other employer must be aggregated (e.g., controlled group). Otherwise, employer contributions are usually per plan. Employee deferrals are combined across jobs.
Max employer profit-sharing for your company
Calculates the maximum additional profit-sharing allowed after your company match, subject to 25% of W-2 and the base cap logic used here.
Remaining employee deferral available
$0
Combined across jobs (employee deferrals).
Employee deferral in your company plan
$0
Limited by remaining deferral and W-2 wages.
Employer funding in your company plan
$0
Match: $0 • Profit-sharing: $0
Total into your company plan
$0
Employee base + employer (match/PS) + catch-up if applicable.
Limits: --
Employer cap: 25% of W-2 (match + PS)
Enter your details and click Calculate.
Planning tool only. Plan documents and aggregation rules may change results.

Quick Calculator (2026) -- Self-Employed (Sole Proprietor / Single-Member LLC)

Self-employed rule of thumb: Employer contribution is commonly 20% of net earnings from self-employment, where net earnings are generally Schedule C net profit minus ½ of self-employment tax (planning version).
Advanced: apply Social Security wage base cap (optional)
If you already have W-2 wages elsewhere, the Social Security portion of SE tax may be reduced. Turn on and enter the annual wage base and SS wages already used.
Estimated self-employment tax
$0
Planning estimate; depends on wage base + other facts.
½ SE tax deduction
$0
Used to compute net earnings for the 20% rule.
Net earnings used (approx.)
$0
Net profit − ½ SE tax (planning version).
Remaining employee deferral available
$0
Combined across jobs (employee deferrals).
Employee deferral in self-employed plan
$0
Limited by remaining deferral and net earnings.
Employer contribution (20% rule)
$0
20% of net earnings (planning version).
Total into self-employed plan
$0
Employee deferral + employer contribution (+ catch-up if applicable).
Notes
--
See details below.
Enter Schedule C net profit and click Calculate.
Planning tool only. Exact results depend on self-employment tax calculations, wage base amounts, and plan documents.

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