2022 Solo 401k Limits & Deadlines
- Contribution limit: The solo 401k contribution limit for 2022 is $61,000 ($67,500 if you’ll be at least 50 years of age by December 31, 2022).
- Contribution breakdown: As an employee, you can contribute up to 100% of your income up to $20,500 ($27,000 if you’re over 50). As an employer, you can contribute up to 25% of your compensation if your business is incorporated and up to 20% if your business is not incorporated. Total employee and employer contributions must not exceed $61,000 ($67,500 if you’re over 50).
- Contribution deadline: You have until the federal tax filing deadline (March 15, 2023 for S-Corps, Multi-Member LLCs, and Partnerships, and April 18, 2023 for C-Corps, Sole Props)
- Secure Act 2.0 update: Under new IRS provisions, if you missed the December 31, 2022 deadline to set your election, you now have until your business’ tax deadline (or the extension deadline if you request an extension) to set up your solo 401k and set your elections. However, you can only make employer profit sharing contributions, but not employee deferrals, as the plan was not established in 2022.
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).
- 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 Props).
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 2022 and 2023, and important deadlines to remember.
Set up a new solo 401k in under 10 minutes
Contribute up to $66,000 and invest in any asset class with tax-free compounding†.
Anyone who makes money from a business, freelancing, or a side hustle is eligible, as long as you have no employees.
Table of Contents
2022 solo 401k contribution limits
The solo 401k contribution limit is $61,000 in 2022. If you’ll be at least 50 years old by December 31, you’re also given $6,500 in catch-up contributions, bringing your total limit to $67,500. Employees can contribute up to 100% of their income, up to $20,500 ($27,000 if you’re over 50). Employers can contribute up to 25% of their income (Up to 20% if you’re not incorporated).
Want to view your specific contribution limits? Use our solo 401k contribution calculator.
Roth solo 401k contribution limits for 2022
The Roth solo 401k contribution limit in 2022 is the same as the employee contribution limits: Up to $20,500 or $27,000 if you’re over 50 years of age.
While employer contributions must always go towards a traditional pre-tax solo 401k, employees can choose to contribute to a Roth solo 401k.
- Traditional: Contributions to the pre-tax solo 401k are made with pre-tax dollars. You get a tax-deduction for the year, but you pay taxes when you withdraw from your account in retirement.
- Roth: Contributions to the Roth solo 401k are made with post-tax dollars. You don’t get a tax-deduction, but you pay zero taxes when you withdraw from your account in retirement.
Employee contribution limits 2022
If you max out employee contributions in 2022, you’re left with $40,500 in room remaining. This can be filled using employer contributions, which is calculated by 25% of compensation if your business is incorporated, and up to 20% if your business is not incorporated.
You could also choose to do a mega backdoor Roth with your solo 401k, which would allow you to contribute even more money into your Roth solo 401k.
Overview of the solo 401k contribution limits for 2022
| Contribution Type | Contribution Amount |
|---|---|
| Employee | $20,500 ($27,000 if for ages 50 or older) |
| Employer | 25% of compensation (20% if you’re not incorporated) |
| TOTAL | $61,000 ($67,500 if for ages 50 or older) |
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, 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 (Up to 20% if you’re not incorporated).
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.
Employee contribution limits 2023
In 2022, you were left with $40,500 after maxing out employee contributions.
In 2023, you’re left with $43,500 in room remaining for employer contributions, an increase of $3,000. Calculations on contributions remain the same. Employer contributions are calculated by using 25% of your compensation if your business is incorporated, and 20% if your business is not incorporated.
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 2022
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 also varies 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 2022, the deadline is December 31, 2022.
- 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 18, 2023.
- The contribution deadline for employers is also the federal tax deadline, April 18, 2023.
- However, if your business is an S corporation, partnership, or LLC taxed as a corporation, your contribution is one month earlier, March 15, 2023.
- Secure Act 2.0 update: Under new IRS provisions, if you missed the December 31, 2022 deadline to set your election, you now have until your business’ tax deadline (or the extension deadline if you request an extension) to set up your solo 401k and set your elections. However, you can only make employer profit sharing contributions, but not employee deferrals, as the plan was not established in 2022.
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, 2022
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, 2022. 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 or a Roth solo 401k.
Under new Secure Act 2.0 provisions, which was signed into law on December 30, 2022, you now have until your federal tax deadline (or the extension deadline if you request an extension) to set up your solo 401k, set your elections, and make your contributions. However, only employer profit sharing contributions are permitted; employee deferrals cannot be made if the plan was not established in 2023.
Second deadline: Funding deadline – April 18, 2023
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 18, 2023.
| Event | Contribution Deadline |
|---|---|
| Open a solo 401k / File election | December 31, 2022 |
| Actual contribution deadline | April 18, 2023 |
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 April 18, 2023.
- If your business is an S corporation, partnership, or LLC taxed as a corporation, your contribution deadline is March 15, 2023.
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 16, 2023.
- A partnership, S corporation, and LLC taxed as a corporation will have until September 15, 2023.
| Entity Type | Contribution Deadline | Contribution Deadline After Extension |
|---|---|---|
| Sole Proprietorship | April 18, 2023 | October 16, 2023 |
| LLC taxed as a sole proprietorship | April 18, 2023 | October 16, 2023 |
| C corporation | April 18, 2023 | October 16, 2023 |
| Partnership | March 15, 2023 | September 15, 2023 |
| LLC taxed as a corporation | March 15, 2023 | September 15, 2023 |
| S corporation | March 15, 2023 | September 15, 2023 |
Isn’t the federal tax deadline April 15 each year?
Yes, the federal tax deadline is normally April 15 every year, unless it falls on a weekend. In 2023, April 15 is a Saturday. It would normally get pushed to the following Monday, but that’s also a holiday, Emancipation Day. Therefore, the tax deadline gets pushed to Tuesday, April 18, 2023.
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, you do not need to contribute to your solo 401k plan every year and your account can remain open in good standing. It’s entirely your decision how much you contribute, if at all. There is no minimum contribution requirement with a solo 401k.
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 2022, you could get a tax deduction of up to $61,000 or $67,500 if you’re over 50.
- In 2023, you could get a tax deduction of up to $66,000 or $73,500 if you’re over 50.
Not all solo 401k plans come with a Roth option. Compare your different provider options here.
Wrapping Up
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.
Contribution Limits
- The solo 401k contribution limit for 2022 is $61,000. If you’re over 50, the limit is $67,500 when you account for catch-up contributions of $6,500.
- The solo 401k contribution limit for 2023 is $66,000. If you’re over 50, 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 (Up to 20% if you’re not incorporated).
Use our solo 401k contribution calculator to determine your contribution room for 2022 and 2023.
Contribution Deadlines
- Employees have until December 31, 2022 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 18, 2023) to actually pay the money into your account.
- Update: Under new Secure Act 2.0 provisions, if you missed the election deadline, you now have until your tax deadline (or the extension deadline if you request an extension) to set up your solo 401k, set your elections, and make your contributions. However, you can only make employer profit sharing contributions, but not employee deferrals, as the plan was not established in 2022.
- 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 18, 2023.
- Employers running a partnership, S corporation, or LLC taxed as a corporation have until March 15, 2023.
- Employers can file for an extension that gives them six additional months after their contribution deadline.
At Ocho, 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.
Free Live Workshop
7 Money Strategies to Optimize Your Finances as a Business Owner
From reducing your tax bill to leveraging your business expenses… Learn how to tackle your business finances this year and implement proven strategies—without the overwhelm or spending years studying tax code.
Can't make it live?
No stress! Register and we'll send you a replay!
