Solo 401k Contribution Deadline

The Solo 401k contribution deadline can vary depending on two factors:

The business type (sole proprietorship, single-member or multiple-member LLC, C or S corporation)

The way in which the contribution is made, such as by employee deferral or profit-sharing component of contribution.

Let’s look at the various deadlines according to business and contribution type:

Proverbs 12:24

“Diligent hands will rule, but laziness ends in forced labor.”

Sole Proprietor and Single Member LLC

Elective Deferral

According to IRS contribution deadline rules, plan participants must formally elect to make an employee deferral contribution by Dec. 31. However, the actual contribution can be made up until the personal tax-filing deadline (April 15, or October 15 if an extension was filed).
Pretax and/or after-tax (Roth) funds can be used to make employee deferral contributions.

Profit Sharing Contribution

A sole proprietorship may make annual profit-sharing contributions to a Solo 401(k) plan on behalf of the business owner and spouse.
Internal Revenue Code Section 401(a)(3) states that employer contributions are limited to 25% of the business entity’s income subject to self-employment tax. Schedule C filers (this includes sole-proprietors and single member LLC) must base their maximum contribution on earned income, an additional calculation that lowers their maximum contribution to 20% of earned income. IRS Publication 560 contains a step-by-step worksheet for this calculation.
In general, compensation can be defined as your net earnings from self-employment activity. This definition takes into account the following eligible tax deductions: (1) the deduction for half of the self-employment tax, and (2) the deduction for contributions on your behalf to the Solo 401(k) plan.
A sole proprietor’s Solo 401(k) contributions for a profit-sharing component must be made by the tax-filing deadline (April 15, or October 15 if an extension was filed).

Multi-Member LLC and Partnerships

Elective Deferral

According to IRS contribution deadline rules, plan participants must formally elect to make an employee deferral contribution by Dec. 31. However, the actual contribution can be made up until the personal tax-filing deadline (April 15, or October 15 if an extension was filed).
Pretax and/or after-tax (Roth) funds can be used to make employee deferral contributions.

Profit Sharing Contribution

A multiple-member LLC business may make annual profit sharing contributions to a Solo 401(k) plan on behalf of its business owners. Internal Revenue Code Section 401(a)(3) states that total contributions are limited to 25 percent of the business entity’s income subject to self-employment tax.
A multiple-member LLC must make any profit-sharing contributions before its tax-filing deadline.

S-Corporation and C-corporation

Elective Deferral

For a corporation, employee salary deferral contribution must be done through the payroll and reported on Form W-2. An employee of a C Corporation or S Corporation can make a deferral contribution at any time within the year when the income to be contributed is earned. Timing of the contribution typically will depend on the corporation’s payroll structure. If the corporation uses a payroll company, a deferral contribution generally will be deducted from the employee’s paycheck.
The Department of Labor’s safe harbor guidelines stipulate that a deposit for deferral contribution to a Solo 401(k) account is to be made within seven days of the date on which the employee elects to make the contribution.
Pretax and/or after-tax (Roth) funds can be used to make employee deferral contributions.

Profit Sharing Contribution

The corporation may make annual Solo 401(k) contributions for profit sharing component for its owner(s)/employee(s).
The corporation must make any profit-sharing contributions before its tax-filing date (including extension).

Contribution Calculator

Use the Solo 401k Contribution Calculator to determine your contribution limit this year:

Contribution Calculator

What our clients are saying:

I started a Solo 401K plan with Dmitriy’s Sense Financial in 2015. It has been a great experience since then and the Solo 401k plan has been a wonderful tool.

Tony S. – Skillman, NJ

In my opinion, anyone that owns their own business should have a Solo 401K, and I would highly recommend Sense Financial – you will not be disappointed!

Ben D. – Spokane, WA

Dmitriy and his staff have been incredibly kind, helpful, and responsive while I have been going through the process of setting up my Solo 401k plan.

Sandra H. – Chicago, IL

Alternate investment options with your self-directed account:

Real Estate

Precious Metals

Private Business

Stocks & Bonds

Private Lending

Cryptocurrency

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