Solo 401(k) Contribution Calculator
Use this calculator to estimate your maximum Solo 401(k) contributions for the current tax year. It accounts for both employee (elective deferral) and employer (profit-sharing) contributions, as well as catch-up contributions for those aged 50 and over.
Your Estimated Maximum Solo 401(k) Contributions:
Enter your details and click "Calculate" to see your potential contributions.
Understanding Your Solo 401(k) Contributions
A Solo 401(k), also known as an Individual 401(k) or One-Participant 401(k), is a powerful retirement savings plan designed specifically for self-employed individuals and small business owners with no full-time employees other than themselves or their spouse. It offers significantly higher contribution limits than other self-employed retirement plans like SEP IRAs, by allowing you to contribute in two capacities: as both an employee and an employer.
Two Types of Contributions
The unique advantage of a Solo 401(k) lies in its dual contribution structure:
-
Employee Contributions (Elective Deferrals): As an employee of your own business, you can contribute up to 100% of your net self-employment income, up to the annual IRS limit. For 2024, this limit is $23,000. If you are age 50 or older, you can also make an additional "catch-up" contribution, which is $7,500 for 2024.
-
Employer Contributions (Profit Sharing): As the employer, your business can make a profit-sharing contribution. This is typically limited to 25% of your "net earnings from self-employment." It's important to note that "net earnings from self-employment" is not simply your business's net profit. For this calculation, it's your net profit minus one-half of your self-employment tax.
Overall Contribution Limit
There's an overall limit to the total amount you can contribute to your Solo 401(k) each year, combining both your employee and employer contributions. For 2024, this limit is $69,000 (or $76,500 if you are age 50 or older and make the full catch-up contribution).
How the Calculator Works
Our Solo 401(k) Contribution Calculator simplifies these complex rules:
- Net Self-Employment Income: This is your business's profit after expenses, typically found on Line 31 of your Schedule C (Form 1040). The calculator uses this figure to determine both your employee contribution potential and the base for your employer contribution.
- Your Age: Your age is used to determine if you are eligible for the additional catch-up contribution.
- The calculator then applies the current IRS limits and the specific self-employment tax calculations to provide an estimate of your maximum possible contributions.
Important Considerations
- Annual Limit Changes: Contribution limits are subject to change annually by the IRS. This calculator uses the 2024 limits.
- Net Earnings Calculation: The calculation of "net earnings from self-employment" for employer contributions involves deducting one-half of your self-employment tax. Our calculator estimates this for you.
- Consult a Professional: This calculator provides an estimate for informational purposes only. For personalized advice and to ensure compliance with all IRS regulations, always consult with a qualified financial advisor or tax professional.
Examples:
Let's look at a few scenarios using 2024 limits:
Example 1: Young Entrepreneur with Moderate Income
- Net Self-Employment Income: $70,000
- Age: 35
- Employee Contribution: $23,000 (max elective deferral)
- Employer Contribution: Approximately $14,000 (25% of adjusted net earnings)
- Total Contribution: Approximately $37,000
Example 2: Established Business Owner, Over 50
- Net Self-Employment Income: $150,000
- Age: 55
- Employee Contribution: $30,500 ($23,000 elective deferral + $7,500 catch-up)
- Employer Contribution: Approximately $38,500 (25% of adjusted net earnings)
- Total Contribution: Approximately $69,000 (capped by the overall limit)
Example 3: Lower Income Scenario
- Net Self-Employment Income: $20,000
- Age: 40
- Employee Contribution: $20,000 (capped by 100% of income)
- Employer Contribution: $0 (no room left after employee contribution hits overall limit, or very minimal if income is low)
- Total Contribution: $20,000
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function calculateSoloKContributions() {
var netSelfEmploymentIncome = parseFloat(document.getElementById('netSelfEmploymentIncome').value);
var age = parseInt(document.getElementById('age').value);
var resultDiv = document.getElementById('result');
// Validate inputs
if (isNaN(netSelfEmploymentIncome) || netSelfEmploymentIncome < 0) {
resultDiv.innerHTML = 'Please enter a valid non-negative number for Net Self-Employment Income.';
return;
}
if (isNaN(age) || age 120) {
resultDiv.innerHTML = 'Please enter a valid age between 18 and 120.';
return;
}
// 2024 IRS Contribution Limits
var electiveDeferralLimit = 23000;
var catchUpLimit = 7500;
var overallLimit = 69000;
// Self-Employment Tax Rates (2024)
var socialSecurityWageBase = 168600;
var seTaxRateSS = 0.124; // Social Security
var seTaxRateMedicare = 0.029; // Medicare
var seTaxRateTotal = 0.153; // Combined SS + Medicare for income below wage base
var seTaxableIncomeFactor = 0.9235; // Net earnings for SE tax are 92.35% of net profit
var maxEmployeeContribution = 0;
var maxEmployerContribution = 0;
var totalMaxContribution = 0;
// 1. Calculate Employee Contribution (Elective Deferral)
maxEmployeeContribution = Math.min(netSelfEmploymentIncome, electiveDeferralLimit);
if (age >= 50) {
maxEmployeeContribution += catchUpLimit;
}
// Employee contribution cannot exceed overall limit
maxEmployeeContribution = Math.min(maxEmployeeContribution, overallLimit);
// 2. Calculate Employer Contribution (Profit Sharing)
// First, calculate Net Earnings from Self-Employment for employer contribution base
// This is Net Profit – (1/2 * SE Tax)
var seTaxableIncome = netSelfEmploymentIncome * seTaxableIncomeFactor;
var calculatedSETax = 0;
if (seTaxableIncome <= socialSecurityWageBase) {
calculatedSETax = seTaxableIncome * seTaxRateTotal;
} else {
calculatedSETax = (socialSecurityWageBase * seTaxRateSS) + (seTaxableIncome * seTaxRateMedicare);
}
var deductibleSETax = calculatedSETax / 2;
var compensationForEmployerContribution = netSelfEmploymentIncome – deductibleSETax;
// Employer contribution is 25% of compensationForEmployerContribution
var potentialEmployerContribution = compensationForEmployerContribution * 0.25;
// Employer contribution is also limited by the overall limit minus employee contribution
var remainingOverallLimit = overallLimit – maxEmployeeContribution;
maxEmployerContribution = Math.min(potentialEmployerContribution, remainingOverallLimit);
maxEmployerContribution = Math.max(0, maxEmployerContribution); // Ensure it's not negative
// 3. Calculate Total Contribution
totalMaxContribution = maxEmployeeContribution + maxEmployerContribution;
// Final check to ensure total doesn't exceed overall limit (should be handled by employer calc, but good to double check)
totalMaxContribution = Math.min(totalMaxContribution, overallLimit);
// Format results as currency
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
minimumFractionDigits: 0,
maximumFractionDigits: 0
});
resultDiv.innerHTML =
'Maximum Employee Contribution:
' + formatter.format(maxEmployeeContribution) + '' +
'Maximum Employer Contribution:
' + formatter.format(maxEmployerContribution) + '' +
'Total Maximum Solo 401(k) Contribution:
' + formatter.format(totalMaxContribution) + '' +
'(Based on 2024 IRS contribution limits)';
}