Solo 401(k) Contribution Limits for 2026: How Much Can You Put In?

A Solo 401(k) is one of the most powerful tax tools a freelancer has, but its limits are easy to misread. This guide explains the 2026 numbers and how to work out your own limit.

The 2026 numbers

The catch-up amounts sit on top of the $72,000 limit for eligible savers. These limits change most years, so check the IRS announcement each autumn.

The employee deferral

You can defer up to $24,500 of your earnings as the employee, or 100% of your net self-employment earnings if that is lower. You choose how much you contribute and whether it is pre-tax or, if your plan allows, Roth.

The employer contribution

Your business can add an employer contribution of up to 25% of compensation. For a sole proprietor, compensation means net self-employment earnings after subtracting half of self-employment tax, and the 25% effectively becomes about 20% of that figure because the contribution itself reduces the base.

How to calculate your own limit

1. Start with net profit from Schedule C.
2. Subtract half of your self-employment tax.
3. Multiply the result by 0.20 to estimate the employer contribution.
4. Add your employee deferral, up to $24,500.
5. Compare the total with $72,000 and take the lower figure.

The IRS worksheets in Publication 560 give the exact calculation, and most tax software handles it automatically.

Examples

Net profit $40,000. Half of self-employment tax is about $2,830, leaving about $37,170 of plan earnings. The employer share is about $7,430. If you defer $12,000, your total is about $19,400.

Net profit $150,000. The employer share is about $27,900 and you can defer the full $24,500, for roughly $52,400, well under the overall limit.

Net profit of about $250,000 or more. You may reach the $72,000 maximum, plus catch-up if you are eligible.

Deadlines

For most people the plan must be established by December 31 to make employee deferrals for that year, and the money should be contributed soon after you decide. Employer contributions can be made up to your tax filing deadline, including extensions. A rule from recent legislation lets certain sole proprietors set up a new plan and make employee contributions after year-end, up to the filing deadline, so ask your provider whether it applies.

Reporting

Once plan assets exceed $250,000 at year-end, you must file Form 5500-EZ with the IRS. Below that, no annual filing is required for a plan with only you and a spouse.

Common mistakes

• Treating the $72,000 limit as available at any income. Your earnings cap your contributions.
• Forgetting that the deferral limit is per person across all 401(k) plans. If you also have a 401(k) at a day job, your deferrals are combined.
• Calculating the employer share on gross revenue instead of net earnings.

Frequently asked questions

Do my contributions reduce my self-employment tax?

No. They reduce income tax, not self-employment tax.

Can I contribute if I only freelance part-time?

Yes. You need self-employment income and no employees other than a spouse.