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Solo 401k Contribution Limits

The 2014 Solo 401k contribution limits are $52,000 and $57,500 if age 50 or older (2013 limits are $51,000 and $56,500 if age 50 or older). The annual Solo 401k contribution consists of 2 parts a salary deferral contribution and a profit sharing contribution. The total allowable contribution adds these 2 parts together to get to the maximum Solo 401k contribution limit.

Solo 401k contributions are flexible. Both the salary deferral and the profit sharing contributions are discretionary and can be changed at anytime based on business profitability.

The contribution limits can be doubled for husband and wife businesses. Businesses with a spouse on the payroll can also contribute to the Solo 401k. There would be one Solo 401k for the business with two participants.

Provided a business owner and spouse have sufficient income from the business, both may be able to contribute $52,000 each or $57,500 each if both are age 50 or older.

Solo 401k Contribution Calculations

NOTE: The calculation of how much can be contributed to the Solo 401k is dependent on whether your business is taxed as a corporation and you receive a W-2 or if you are taxed as a sole proprietorship. Examples of both are shown below.

Sole proprietorship, partnership or a LLC taxed as a sole proprietorship.
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View examples of solo 401k contribution limits.

S or C corporation or a LLC taxed as a corporation.
- View examples of solo 401k contribution limits.

 

How Can BCM Help You?

Beacon Capital Management Advisors (BCM) is experienced in setting up retirement plans for our clients. BCM provides retirement plans to the self employed, freelancers, entrepreneurs, independent contractors and small business owners and is registered in 50 States. Complete the form below and a BCM Advisor will promptly respond to your inquiry.

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Disclosures:

*The information on this page is for informational purposes only and does not constitute, and should not be construed as, professional, legal or tax advice. To determine your individual tax situation and specific needs, please consult a professional tax advisor.

*Information contained in these sections merely highlight some benefits. There are risks involved with all investments that could include tax penalties and risk/loss of principal.