The solo 401k contribution limit for 2022 is $61,000. If you’re at least 50 years of age, you get an additional $6,500 in catch-up contributions, bringing your limit to $67,500.
The solo 401k contribution limit for 2023 is $66,000. If you’re at least 50 years of age, you get an additional $7,500 in catch-up contributions, bringing your limit to $73,500.
You can contribute as both the employee and employer with a solo 401k:
Employee elective deferral: Can contribute up to 100% of compensation up to $20,500 ($27,000 if age 50+) in 2022 and $22,500 ($30,000 if age 50+) in 2023.
Employer nonelective contributions: Can contribute up to 25% of compensation if the business is incorporated, and 20% if the business is not incorporated.
The total contributions (employee + employer) must not exceed the yearly solo 401k contribution limit.
Employee contributions can either be pre-tax (traditional) or post-tax (Roth).
Employer contributions can only be pre-tax (traditional).
Employer pre-tax contributions may be tax deductible on the business’ tax return, whereas employee pre-tax contributions may be tax deductible on the individual’s tax return.
If you have multiple businesses, or a day job, you can only contribute income from the business with the solo 401k.