2022 Solo 401k Limits & Deadlines
The solo 401k contribution limit for 2022 was $61,000 ($67,500 if you were at least 50 years of age by December 31, 2022). The contribution deadline for corporations, multi-member LLCs, and partnerships was March 15, 2023, and the deadline for C corporations and sole proprietorships was April 18, 2023. Business owners who filed for an extension were given an additional six months to make their contributions (until September 15th or October 16th, if approved).
2023 Solo 401k Limits & Deadlines
- Contribution limit: The solo 401k contribution limit for 2023 is $66,000 ($73,500 if you’ll be at least 50 years of age by December 31, 2023).
- Contribution breakdown: As an employee, you can contribute up to 100% of your income up to $22,500 ($30,000 if you’re over 50). As an employer, you can contribute up to 25% of your compensation (up to 20% if you’re not incorporated). Total employee and employer contributions must not exceed $66,000 ($73,500 if you’re over 50). Employee contributions can be made to a traditional or Roth solo 401k, while employer contributions can only be made with pre-tax income into a traditional solo 401k.
- Plan set up and election deadline: To make employee contributions to your solo 401k, you must formerly file an election that states how much you’re going to contribute as an employee, and to which accounts it should go towards (pre-tax or Roth). Solo 401k plan elections generally must be made by the last day of the calendar year, on December 31, 2023. If you do not have a solo 401k plan yet, but wish to set one up and make employee contributions for 2023, you must establish your plan and make an election by December 31, 2023.
- Contribution deadline: You have until the federal tax filing deadline (March 15, 2024 for S corps, multi-member LLCs, and partnerships, and April 15, 2024 for C corps, sole proprietorships, and LLCs taxed as sole proprietorships) to make your contribution. You can get an additional six months to make your contribution if you file for a tax extension.
With a solo 401k, you contribute to your plan as both the employer and the employee. Contribution limits and deadlines are different for both sides, and can vary even further depending on your business entity. If you’re considering opening an account and making contributions, here’s a full breakdown of how much you’re allowed to contribute for 2023, and important deadlines to remember.
2023 solo 401k contribution limits
The IRS recently released new 2023 contribution limits for the solo 401k, adjusted for inflation.
The solo 401k contribution limit is $66,000 in 2023. If you’ll be at least 50 years old by December 31, 2023 you’re also given $7,500 in catch-up contributions, bringing your total limit to $73,500. Employees can contribute up to 100% of their income, up to $22,500 ($30,000 if you’re over 50). Employers can contribute up to 25% of their income (and approximately 20% if unincorporated).
Roth solo 401k contribution limits for 2023
In 2023, the Roth solo 401k contribution limit is $22,500 ($30,000 if you’re over 50). Because Roth contributions can only be made by employees, the Roth solo 401k contribution limit is the same as the employee contribution limit. To contribute even more to a Roth solo 401k than the actual contribution limit, you can do a mega backdoor Roth solo 401k conversion.
Employee contribution limits 2023
Because the total contribution limit to a solo 401k is $66,000, if you max out your employee contributions, you’re left with $43,500 in room remaining to make employer contributions. Calculations on contributions remain the same. Employer contributions are calculated by using 25% of your compensation if your business is incorporated, and approximately 20% if your business is unincorporated.
Also read: Solo 401k Contribution Types Explained
Overview of the solo 401k contribution limits for 2023
|Contribution Type||Contribution Amount|
|Employee||$22,500 ($30,000 if for ages 50 or older)|
|Employer||25% of compensation (20% if you’re not incorporated)|
|TOTAL||$66,000 ($73,500 if for ages 50 or older)|
Solo 401k Contribution Deadlines for 2023
Contribution deadlines can be a little bit tricky since there are a few different dates to remember. Not only do employees and employers have different deadlines, it can also vary depending on your business entity.
A lot of dates are mentioned below. Here’s a quick overview before you dive in to help make sense of everything.
- Because you make contributions as both the employee and the employer with a solo 401k, the contribution deadlines are different.
- Employees must set up their solo 401k and file an election by the last day of the year, each year they want to contribute. For 2023, the deadline is December 31, 2023. Filing an election only requires you to officially determine how much you’ll contribute and which accounts they’ll be going to (Roth or pre-tax). Then, you have until the federal tax deadline to actually contribute the funds into your account. This year, the federal tax deadline is April 15, 2024.
- The contribution deadline for employers is also the federal tax deadline, April 15, 2023.
- However, if your business is an S corporation, partnership, or LLC taxed as a corporation, your contribution is one month earlier, March 15, 2024.
Deadlines for employees
Employees have two different deadlines: One for setting up an account and filing a deferral election, and another for actually sending the money and making the contribution into your account.
First deadline: Election deadline – December 31, 2023
If you don’t have a solo 401k already, you must set up your account and file your deferral election before the end of the year, December 31, 2023. If you miss the deadline, you won’t be able to make contributions for this year. You don’t have to send any money by this date, you only need to file the election. Basically, you’re telling the IRS exactly how much you’re going to contribute that year AND if they’ll be going towards a traditional solo 401k as pre-tax income or a Roth solo 401k as after-tax income.
Second deadline: Funding deadline – April 14, 2024
After you file your deferral election, you have until the federal tax deadline to actually make the contributions into your solo 401k account, which is April 15, 2024.
|Open a solo 401k / file election||December 31, 2023|
|Contribution deadline for employee contributions||April 15, 2024|
Deadlines for employers
For employers, the contribution deadline depends on how your business is structured.
- If your business is a sole proprietorship, C corporation, or LLC taxed as a sole proprietorship, your contribution deadline is the federal tax deadline April 15, 2024.
- If your business is an S corporation, partnership, or LLC taxed as a corporation, your contribution deadline is March 15, 2024.
You can also file for an extension
If approved, you’ll get an additional six months to make your contributions.
- A sole proprietorship, C corporation, and LLC taxed as a sole proprietorship will have until October 15, 2024.
- A partnership, S corporation, and LLC taxed as a corporation will have until September 15, 2024.
|Entity Type||Contribution Deadline||Contribution Deadline After Extension|
|Sole Proprietorship||April 15, 2024||October 15, 2024|
|LLC taxed as a sole proprietorship||April 15, 2024||October 15, 2024|
|C corporation||April 15, 2024||October 15, 2024|
|Partnership||March 15, 2024||September 15, 2024|
|LLC taxed as a corporation||March 15, 2024||September 15, 2024|
|S corporation||March 15, 2024||September 15, 2024|
2022 vs 2023 contribution limits
- In 2023, the total solo 401k contribution limit increased by $5,000 ($66,000 in 2023 vs $61,000 in 2022).
- In 2023, catch-up contributions are $7,500 over the $6,500 offered in 2022. People ages 50 and up can contribute $73,500 in 2023 vs $67,500 in 2022.
- In 2023, employees can contribute an extra $2,000.
- When you max out employee contributions, employers were left with $40,500 in contribution room in 2022. In 2023, maxing out employee contributions would leave you with $43,500 in contribution room.
|Contribution Type||2022 Limits||2023 Limits|
|Employee Elective Deferrals||$20,500 ($27,000 if for ages 50 or older)||$22,500 ($30,000 if for ages 50 or older)|
|Employee catch-up contributions||$6,500||$7,500|
|Employer contributions||25% of compensation (20% if you’re not incorporated)||25% of compensation (20% if you’re not incorporated)|
|Total||$61,000 ($67,500 if age 50+)||$66,000 ($73,500 if age 50+)|
Solo 401k Contribution Limits for Prior Years
Contribution limits for the solo 401k rise by about $1,000 each year.
- 2021: $58,000
- 2020: $57,000
- 2019: $56,000
- 2018: $55,000
- 2017: $54,000
- 2016: $53,000
Do I need to contribute to a solo 401k every year?
No, there is no minimum contribution requirement with a solo 401k. You do not need to contribute to your solo 401k plan every year and your account will remain open in good standing. It’s entirely your decision how much you contribute, and to which accounts (Roth or pre-tax).
Tax Deduction Limits
While Roth solo 401k contributions are not tax deductible, traditional pre-tax solo 401k contributions are deducted from your taxable income. Since both employee and employer contributions can be made towards a pre-tax solo 401k, your could potentially get a tax deduction up to the solo 401k contribution limit:
- In 2023, you could get a tax deduction of up to $66,000 if you’re under 50 years old, or $73,500 if you’re 50 years of age or older.
Not all solo 401k plans come with a Roth option. Compare your different provider options here.
A lot of numbers and dates were mentioned in this guide. Here’s a summary of the solo 401k contribution limits and deadlines for 2022 and 2023.
- The solo 401k contribution limit for 2023 is $66,000. If you’ll be 50 years of age or older by December 31, 2023, the limit is $73,500 when you account for catch-up contributions of $7,500.
- With a solo 401k, you make contributions as both the employer and the employee. Employees can contribute up to 100% of their compensation up to a maximum of $20,500 ($27,000 if you’re over 50). Employers can contribute up to 25% of compensation (approximately 20% if you’re unincorporated).
Use our solo 401k contribution calculator to determine your contribution room for 2022 and 2023.
- Employees have until December 31, 2023 to file an election. You don’t need to pay anything just yet, you only need to tell the IRS how much you’ll be contributing and whether it’s going into a traditional solo 401k or a Roth solo 401k. After filing an election, you have until the federal tax-filing deadline next year (April 15, 2024) to actually pay the money into your account.
- On the employer side, your contribution deadline depends on what business entity you’re operating. Employers running a sole proprietorship, C corporation, or LLC taxed as a sole proprietorship have until April 15, 2024. Employers running a partnership, S corporation, or LLC taxed as a corporation have until March 15, 2024.
- Employers can file for an extension that gives them six additional months to make their contributions after the stated contribution deadlines.
At Carry, we can create your solo 401k plan for you, handle all tax filings, and curate your investments. All for zero fees on assets under management. Learn more.