Solo 401k Schedule C Retirement Plan Options for Entrepreneurs

As an entrepreneur, you're likely no stranger to juggling multiple responsibilities, but saving for retirement shouldn't be one of them. With a Solo 401k Schedule C retirement plan, you can set aside a significant amount of money for the future while still running your business.

The Solo 401k Schedule C plan is designed specifically for self-employed individuals and business owners with a single-member limited liability company (LLC) or sole proprietorship, also known as a Schedule C business.

A solo 401(k) plan is a type of retirement savings account for self-employed individuals or employers with no employees besides themselves and their spouses.

You can open a solo 401(k) at most online brokers, though you'll need an employer identification number. The broker will provide a plan adoption agreement for you to complete, as well as an account application. Once you've done that, you can set up contributions.

You can typically make employer profit-sharing contributions until your tax-filing deadline for the tax year. If you need help managing the funds in your solo 401(k), you might want to engage an online planning service.

To be eligible to open a solo 401(k), you need to claim some self-employment income on your tax return. It's also important to note that self-employment doesn't need to be your only source of income.

A solo 401(k) plan has the same rules and requirements as any other 401(k) plan. The business owner wears two hats in a 401(k) plan: employee and employer. Contributions can be made to the plan in both capacities.

The possible plans for a business owner include a solo 401(k) plan, also known as a one-participant 401(k) plan. A solo 401(k) is an individual 401(k) designed for a business owner with no employees.

Here are some key deadlines to keep in mind:

Note that once the plan gets going, it may require some additional paperwork, such as filing Form 5500-SF with the department of labor if your 401(k) plan has $250,000 or more in assets at the end of a given year.

A solo 401(k) is a type of retirement savings account for self-employed individuals or employers with no employees besides themselves and their spouses.

To be eligible to open a solo 401(k), you need to claim some self-employment income on your tax return. This can include income from a full-time job and consulting work on the side.

Here are the key types of solo 401(k) plans:

These plans have the same rules and requirements as any other 401(k) plan, and the business owner wears two hats: employee and employer.

A retirement plan is a type of savings account designed to help you prepare for your golden years. It's a way to set aside money for retirement, and there are several types to choose from.

You can open a solo 401(k) plan if you're a business owner with no employees, or if you're self-employed and have a spouse. This type of plan allows you to contribute to your retirement account as both an employee and an employer.

A solo 401(k) plan is not a new type of plan, but rather a traditional 401(k) plan designed for one person. It has the same rules and requirements as any other 401(k) plan.

To be eligible for a solo 401(k) plan, you need to claim some self-employment income on your tax return. This can include income from a side hustle or a small business, as long as you're the only employee.

The IRS requires that you undergo compliance testing each year for 401(k) plans with multiple employees. However, since a solo 401(k) plan has no employees, no compliance testing is required.

You can establish a solo 401(k) plan for free at any major brokerage firm, using their boilerplate materials and plan document.

Starting in 2026, the Secure Act requires that catch-up contributions for solo 401(k)s be made to the Roth solo 401(k) if the individual earned more than $145,000 in the prior year in that job.

The basic difference between a Roth 401(k) and a traditional 401(k) is that the Roth 401(k) is funded with after-tax contributions while the traditional 401(k) is funded with pretax contributions.

Deciding which type of account to contribute to largely depends on your individual tax situation, and it is best to consult with your tax advisor for this decision.

With a Roth 401(k), you pay taxes today on your earned income in return for tax-free withdrawals in retirement.

A solo 401(k) offers two tax options: traditional and Roth. The traditional option reduces your income in the year you make contributions, but distributions in retirement will be taxed as ordinary income.

With a traditional 401(k), you'll pay taxes and penalties on distributions before age 59 ½, unless there are a few exceptions. The Roth solo 401(k) offers no initial tax break, but allows you to take distributions in retirement tax-free.

You can choose between the two options based on your income expectations in retirement and future tax brackets. If you expect your income to be higher in retirement, a Roth might be a better choice.

To set up a solo 401(k) plan, you must establish it by December 31st of the tax year you'd like to contribute for. This allows you to make contributions by the end of the calendar year.

You can open a solo 401(k) at most online brokers, though you'll need an employer identification number. The broker will provide a plan adoption agreement for you to complete, as well as an account application.

To complete the setup, you'll need to complete a basic plan document, an adoption agreement, account applications, and other paperwork. This process has been simplified for individual 401(k)s and is handled in tandem with the plan administrator or financial institution that will hold the plan's assets.

Here are the key steps to consider when setting up your solo 401(k) plan:

Note that once the plan gets going, it may require some additional paperwork, such as an annual report on Form 5500-SF if your 401(k) plan has $250,000 or more in assets at the end of a given year.

Opening a retirement account can be a straightforward process. You can establish a solo 401(k) plan by December 31st of the tax year you'd like to contribute for.

To open a solo 401(k), you'll need to find a financial institution that allows individual 401(k) accounts. Key considerations include fees, account minimums, investment options, trading costs, and plan features.

Fidelity offers a simplified process for setting up individual 401(k) plan documents and accounts with no account fees and no minimums. Schwab, Vanguard, and E-Trade also have individual 401(k) account options.

You can open a solo 401(k) at most online brokers, though you'll need an employer identification number. The broker will provide a plan adoption agreement for you to complete, as well as an account application.

A solo 401(k) is an individual 401(k) designed for a business owner with no employees. In fact, IRS rules say you can't contribute to a solo 401(k) if you have full-time employees, though you can use the plan to cover both you and your spouse.

To make contributions, you'll need to complete a basic plan document, an adoption agreement, account applications, and other paperwork. This process has been simplified for individual 401(k)s and is handled in tandem with the plan administrator or financial institution that will hold the plan's assets.

Here are some key deadlines to keep in mind:

Calculating your solo 401(k) contribution limits can be a bit tricky, but don't worry, we've got you covered. The maximum contribution limit is $69,000 for 2024, and it includes both elective deferrals and employer contributions.

You can make elective deferrals up to 100% of your compensation, which is your earned income if you're self-employed. The annual contribution limit for elective deferrals is the same as the total contributions to your account, excluding catch-up contributions for those 50 and over.

To calculate your total contributions, you'll need to consider both your elective deferrals and employer contributions. For example, if you earned $50,000 from your S Corporation in 2020, you could defer $19,500 in regular elective deferrals and $6,500 in catch-up contributions. Your business could also contribute 25% of your compensation to the plan, which would be $12,500.

Here's a breakdown of the maximum contribution amounts for each contribution type:

Remember, the limit on elective deferrals is by person, not by plan, so if you're also employed by a second company and participating in its 401(k) plan, you'll need to consider the limit for all elective deferrals you make during a year.