Solo 401k Contribution Deadline: A Guide to One-Participant Plans

If you're a solo entrepreneur or small business owner, you're likely familiar with the solo 401k plan, also known as an individual 401k or one-participant 401k plan.

The solo 401k contribution deadline is December 31st of each year, but you can make contributions up until the tax filing deadline, which is typically April 15th.

To be eligible for a solo 401k plan, you must be a self-employed individual or a business owner with no employees other than a spouse.

Contribution limits play a crucial role in determining how much you can contribute to a Solo 401(k) plan. Total contributions to a participant's account, not counting catch-up contributions for those age 50 and over, cannot exceed $69,000 for 2024.

Elective deferrals up to 100% of compensation are allowed, but business owners should be aware that their limits on elective deferrals are by person, not by plan. This means they must consider the limit for all elective deferrals they make during a year.

Here are the contribution limits for a one-participant 401(k) plan:

The deadline for contributions depends on the contribution type. Employee salary deferrals must be contributed by the individual tax filing deadline of the following year, including extensions.

In a one-participant 401(k) plan, elective deferrals can be made up to 100% of compensation, which is the same as earned income for self-employed individuals.

The annual contribution limit for elective deferrals is $69,000 for 2024, and $66,000 for 2023.

Total contributions to a participant's account, not counting catch-up contributions for those age 50 and over, cannot exceed the annual contribution limit.

Here's a breakdown of the limits:

Remember, a business owner participating in multiple 401(k) plans must consider the limit for all elective deferrals they make during a year, not just per plan.

The deadline to open a Solo 401(k) is the tax-filing deadline of the taxpayer/entity, including extensions.

This means you can open a Solo 401(k) as late as September or October of the following year and still make prior year contributions, just like with SEP IRAs.

To make employee salary deferrals for the first plan year, the plan needs to be in existence by December 31.

Employee salary deferrals must be filed by the end of the year if you don't have a Solo 401(k) open already, and the actual dollars must be contributed by the individual tax filing deadline of the following year, including extensions.

The contribution deadline to make 2022 employee salary deferrals is April 18, 2023, or October 16, 2023, with a properly filed extension.

Employer profit-sharing contributions can be made through the employer tax-filing deadline of the following calendar year with extensions, if filed.

Sole proprietorships and C-Corps have a contribution deadline of October 16, 2023, if an extension is filed, while Partnerships and S-Corps have a contribution deadline of September 15, 2023, if an extension is filed.

To contribute to a solo 401k, you must follow the IRS rules and guidelines, which include making contributions before the deadline.

The deadline for solo 401k contributions is December 31st of each year, but you can make contributions up to 3 months after the tax filing deadline, which is typically April 15th.

You can contribute up to 20% of your net earnings from self-employment to a solo 401k, but no more than $57,000 in 2022, or $63,500 if you're 50 or older and make catch-up contributions.

To qualify for a solo 401k, you must have self-employment income, such as income from freelancing or running your own business.