How to Contribute to a Solo 401(k): Limits, Deadlines, and Forms

To contribute to a Solo 401(k) for 2026, you calculate two separate pieces — an employee salary deferral of up to $24,500 and an employer profit-sharing contribution based on your business income — then deposit both into your plan account by your business’s tax filing deadline. The combined total cannot exceed $72,000, or $83,250 if you qualify for the enhanced age-based catch-up.¹ The mechanics are simple once the math and the deadlines are clear, but both differ depending on whether you run a sole proprietorship or an S-corporation.

How Much You Can Contribute in 2026

Solo 401(k) contributions come in two parts. The employee elective deferral is capped at $24,500 for 2026, and that figure applies no matter how your business is organized.² The employer profit-sharing contribution sits on top of that, and the two combined cannot exceed $72,000 for the year before catch-ups.¹

If you turn 50 or older by year-end, you can add an $8,000 catch-up deferral, raising your personal deferral limit to $32,500 and your combined maximum to $80,000. Under SECURE 2.0, participants who are specifically 60, 61, 62, or 63 during 2026 get a larger catch-up of $11,250, which pushes the deferral limit to $35,750 and the combined limit to $83,250.² Once you turn 64, the catch-up drops back to $8,000.

Only the first $360,000 of compensation counts when the plan calculates your contributions.¹ Earnings above that don’t factor into the employer piece.

Calculating the Employer Contribution

The employee deferral is a number you pick. The employer profit-sharing piece is where your entity type changes the math.

Sole Proprietors and Single-Member LLCs

Your employer contribution comes from net self-employment income, and the IRS requires two reductions before you apply a percentage. Subtract the deductible half of your self-employment tax first. Then apply an adjusted rate: because the contribution itself reduces the income it’s based on, a plan that calls for a 25% contribution works out to an effective 20% of your net earnings after the self-employment tax deduction.³ The circular arithmetic is why IRS worksheets and tax software exist for this calculation.

S-Corporation Owners

For an S-corp, the employer contribution can be up to 25% of the W-2 wages your corporation pays you. There’s no circular math because your salary is a fixed number. The combined total of your deferral plus the employer contribution still can’t exceed the $72,000 annual addition limit (plus any catch-up you qualify for). A frequent mistake is setting W-2 salary too low to fund the full contribution: to reach the $72,000 combined limit, you need enough W-2 income that 25% of it, added to your $24,500 deferral, gets you there.

Steps to Make the Contribution

The mechanics are straightforward, but paperwork errors here cause problems at tax time.

Pull Your Plan Information

You need the legal name of your Solo 401(k) plan (as it appears in your adoption agreement) and the plan trust’s own Employer Identification Number, which is separate from your business EIN.⁴ Some providers assign the trust EIN during setup; if yours didn’t, the provider or the IRS can help you obtain one.

Complete the Contribution Remittance Form

Your custodian provides a contribution remittance or transmittal form. You specify the dollar amounts for the employee deferral and the employer portion separately, the tax year the contribution applies to, and whether each piece is traditional or Roth. Fill it in before moving money, because the custodian uses it to classify the funds for tax reporting. Getting the tax-year designation wrong is a common error that can require corrective action to fix.

Transfer the Funds

Most custodians accept an electronic transfer from a linked business checking account through their online portal. Select the contribution option, enter the amounts, and confirm the tax year. You can also mail a check payable to the plan trust with your account number and the tax year on the memo line. Wire transfers work for larger amounts but usually carry a bank fee. Save the confirmation receipt or transaction ID; it proves the date of deposit if a question comes up later.

Contribution Deadlines

Missing a deadline means losing the deduction for that year with no way to recover it. Three separate dates matter.

Plan Establishment

Your Solo 401(k) plan documents must be signed and in place by December 31 of the tax year you want to contribute for. Funding can happen later, but the plan itself must legally exist by year-end. Most online providers can produce adoption agreements within a few days, but there’s no way to retroactively establish a plan after December 31.

Elective Deferral Election

The election to defer salary must also be made by December 31. This is documented in your plan records, not the actual money movement. You’re recording that you intend to defer a specific dollar amount of your 2026 compensation. Miss this and you cannot make employee deferrals for that year, even if you have time left to fund the employer piece.

Funding Deadlines by Entity Type

The deadline to deposit money is tied to your business tax return deadline, including extensions:

Sole proprietors and single-member LLCs file Form 1040 by April 15. Form 4868 extends it to October 15. Contributions must be in the account by the date you actually file, and no later than the extended deadline.⁵
S-corporations file Form 1120-S by March 15. Form 7004 extends it to September 15. Same rule: fund by the filing date, no later than the extension deadline.⁵

Filing an extension is free and buys months of extra time to finalize income and fund the profit-sharing piece. The extension does not extend the time to pay taxes owed.

Traditional or Roth

Most Solo 401(k) plans let you designate your employee deferrals as traditional (pre-tax) or Roth (after-tax), and you can split between them in any proportion as long as the combined deferral stays within the annual limit. Traditional deferrals lower current taxable income and get taxed on withdrawal; Roth deferrals give no upfront deduction but come out tax-free in retirement if the withdrawal is qualified.

SECURE 2.0 also permits plans to allow employer profit-sharing contributions to be designated as Roth.⁶ When elected, the amount is included in your taxable income for the year it’s allocated but grows and distributes tax-free thereafter. Not every provider has updated its plan document to allow this, so confirm with yours before assuming the option is available.

Adding a Working Spouse

A spouse who genuinely works in the business and is compensated for that work can participate in the same Solo 401(k). Each participant gets a separate $72,000 annual addition limit plus any age-based catch-up, so a couple can potentially shelter over $144,000 in a year. The employer contribution for the spouse follows the same math as yours: 25% of W-2 wages from an S-corp, or the adjusted rate applied to net self-employment income from a sole proprietorship.³

What to Watch Out For

Excess Contributions

Contributing above the deferral limit needs to be fixed quickly. You must withdraw the excess deferral plus any earnings on it by April 15 following the year the excess was made. Filing a tax extension does not push this date back. Miss it and the excess gets taxed twice: once in the contribution year, and again when eventually withdrawn.⁷ Excess employer contributions that push you over the Section 415(c) limit can trigger excise taxes and put the plan at risk of disqualification if not corrected. Running the numbers through tax software or with your accountant before funding is the simplest prevention, especially if you also contribute to another retirement plan that shares the same deferral limit.

Prohibited Transactions

You act as both participant and trustee of your Solo 401(k), and the IRS enforces a hard line between plan assets and personal finances. Prohibited transactions include using plan funds for personal benefit, lending between yourself and the plan, and buying or selling property between yourself and the plan.⁸ Buying a vacation home you’ll use, lending yourself money outside the plan’s loan provisions, or investing in a business you or a family member owns all fall inside the prohibition. A violation can disqualify the plan and make all assets immediately taxable. Non-standard investments — real estate, private lending, cryptocurrency — call for guidance from a tax professional who works with self-directed retirement accounts before you proceed.

Form 5500-EZ Once Assets Cross $250,000

When your Solo 401(k) plan assets exceed $250,000 at the end of the plan year, you must file Form 5500-EZ annually.⁹ If you maintain more than one one-participant plan, the threshold applies to the combined assets. The form is also required in the plan’s final year regardless of asset level. Late filing runs $250 per day, up to $150,000 per return.¹⁰ It’s due the last day of the seventh month after plan year-end (July 31 for calendar-year plans), with an extension available. Set a reminder as your balance approaches the threshold.

1
Internal Revenue Service. 2026 Amounts Relating to Retirement Plans and IRAs
2
Internal Revenue Service. 401(k) Limit Increases to $24,500 for 2026, IRA Limit Increases to $7,500
3
Internal Revenue Service. Calculation of Plan Compensation for Sole Proprietorships
4
Internal Revenue Service. One-Participant 401(k) Plans
5
Internal Revenue Service. Publication 509 (2026), Tax Calendars
6
Internal Revenue Service. SECURE 2.0 Act Changes Affect How Businesses Complete Forms W-2
7
Internal Revenue Service. Consequences to a Participant Who Makes Excess Deferrals to a 401(k) Plan
8
Internal Revenue Service. Retirement Topics – Prohibited Transactions
9
Internal Revenue Service. Instructions for Form 5500-EZ
10
Internal Revenue Service. Form 5500-EZ Late Filing Penalties