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
Solo 401(k) Owner-Only -- 2025 Tandy Consulting

Maximize your Solo 401(k) as an owner-only business. This calculator assumes no common-law employees and shows the maximum 2025 contribution space based on your compensation and entity type.

2025 Limits Applied
1. Your Situation
$
Use net earnings from self-employment (after adjustments) for Solo 401(k) purposes.
Age is used only to determine eligibility for the $7,500 catch-up deferral.
Employee deferral: $23,500 Catch-up (50+): $7,500 415(c) total (excl. catch-up): $70,000 Comp limit: $350,000
2. Maximum 2025 Contribution Space
Owner-only Solo 401(k)
Employee deferral (base)
$0
Total between pre-tax and Roth, subject to 402(g) and your compensation.
Employer profit sharing
$0
Up to 20% of net earnings from self-employment (after plan rules).
Total Solo 401(k) base contribution (excludes age 50+ catch-up)
$0
Subject to the 2025 415(c) limit of $70,000 for defined contribution plans.
Age under 50 -- no catch-up available.
Use of 2025 415(c) space 0% of $70,000
Base employee + employer contributions are shown here. Age 50+ catch-up deferrals are on top of this 415(c) limit.
Contribution mix (base 415(c) space)
Employee deferral
Employer profit sharing
Unused 415(c) room

Advanced dollar breakdown

  • Employee base deferral (pre-tax + Roth) $0
  • Employer profit sharing $0
  • Subtotal vs. 415(c) limit $0 / $70,000
  • Unused 415(c) room $70,000
  • Age 50+ catch-up capacity $0
  • Grand total incl. possible catch-up $0

Planner notes

Employee deferral. Up to $23,500 for 2025 (any mix of pre-tax and Roth), limited by compensation. Age 50+ may add an extra $7,500 catch-up, also limited by compensation.

Employer profit sharing. The calculator assumes up to 20% of net earnings from self-employment (sole prop) or 25% of W-2 (S-corp), further limited so that base employee + employer contributions do not exceed the $70,000 415(c) limit.

This is an educational planning tool only and does not replace individualized tax or retirement advice. Confirm final numbers using IRS worksheets and plan documents.

Designed for Solo 401(k) owner-operators.

Solo 401(k) FAQs

Quick answers to common questions about Solo 401(k) plans and how they compare to other small business retirement options.

What is the difference between a SEP IRA and a Solo 401(k)?

Big picture: A SEP IRA is usually simpler but less flexible for owner-operators who want to maximize contributions and use Roth or employee deferrals. A Solo 401(k) typically allows you to get more dollars in, sooner.

  • Who can contribute: With a SEP IRA, contributions are employer-only. There are no employee salary deferrals. With a Solo 401(k), you can contribute both as the employee (deferrals) and as the employer (profit sharing).
  • Employee deferrals: A Solo 401(k) allows up to the annual 401(k) deferral limit (plus catch-up if age 50+). A SEP IRA does not.
  • Roth option: Solo 401(k) plans often allow Roth employee deferrals; SEP IRAs are always pre-tax only.
  • Matching/Profit sharing: Both can use a similar employer percentage formula (e.g., 20% of net SE income for sole props, 25% of W-2 for S-corps), but the Solo 401(k) lets you stack employee deferrals on top.
  • Employees: If you have common-law employees, SEP typically requires you to include them if they meet eligibility rules. A Solo 401(k) is specifically designed for owner-only situations (and sometimes a spouse).

For many high-intent owner-operators, a Solo 401(k) can create more flexibility and higher total contributions than a SEP, especially at modest income levels.

Who qualifies for a Solo 401(k)?

A Solo 401(k) is designed for businesses with:

  • No common-law employees who work 1,000+ hours per year (other than the owner and sometimes the owner's spouse).
  • Self-employment income from a sole proprietorship, single-member LLC, partnership, or S-corp.

If you later hire full-time employees, you may need to convert to a different type of 401(k) plan that covers them.

How does this calculator handle employee vs. employer contributions?
  • Employee deferral: It caps this at the 2025 elective deferral limit, subject to your compensation.
  • Employer profit sharing: It uses up to 20% of net self-employment income (sole prop) or 25% of W-2 pay (S-corp), and then trims that so total base contributions do not exceed the $70,000 415(c) limit.
  • Catch-up: If age 50+, a separate catch-up "layer" is shown on top of the 415(c) limit, still subject to compensation.
Is this a substitute for tax or legal advice?

No. This tool is for education and planning only. It simplifies several IRS rules, ignores some edge cases, and does not replace personalized advice. Always coordinate final contribution amounts with your tax and retirement plan professionals and your plan documents.

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