Solo Roth 401K plan
Hi,
I am over 50 years old, I have SE income of $30,190, for 2024. I have 0 self employment expenses to claim. What is the maximum I can put into my Solo Roth 401K plan? As both employee and employer broken down please.
I already put $29650.02 into the account if that is too much what do I do? Also as a Solo Proprietor do I have until 4/15/25 to correct it?
Thanks so much!
Permalink Submitted by Alan - IRA critic on Mon, 2025-03-24 17:32
You are over your contribution limit. One reliable calculator available on line comes up with the following limits:
Employee contribution elective deferral of 23,000. A catch up contribution of 2528.57 and an employer contribution of also 2528.57. Total allowed 28,057. Your excess is 1593.
You can request a return of excess elective deferrals of the above amount, which must be distributed to you with any allocated earnings by 4/15/2025. If there are earnings, they will be taxable on your 2025 return. Because these were Roth deferrals, your taxable income will not increase.
Permalink Submitted by D S on Mon, 2025-03-24 19:10
Thanks sooo much! 🙂
Permalink Submitted by D S on Tue, 2025-03-25 10:06
Hi,
I need some clarification please. I am confused. I ran the above information in a program. It came up with the same number as you 28,057 as most I can put in, however it said that is most I can put in as an employee contribution. It said I can put in an additional $5611 as an employer.
Factual IRS Formula for Employer Contribution
Per IRS Publication 560, for a sole proprietor or single-member LLC:
• Employer contribution = 20% of net earnings from self-employment (after deducting half of self-employment tax)
Your Case (All Prior Calculations Repeated Below for Transparency)
1. Gross self-employment income:
30,190
2. SE tax base (92.35% of gross):
30,190 \times 0.9235 = 27,888.67
3. Self-employment tax:
27,888.67 \times 0.153 = 4,267.96
4. Deductible portion of SE tax (½):
4,267.96 \div 2 = 2,133.98
5. Net earnings after SE tax deduction (contribution base):
30,190 – 2,133.98 = 28,056.02
Employer Contribution Limit (2024)
• 20\% \times 28,056.02 = \boxed{5,611.20}
This is the maximum employer (profit-sharing) contribution you can make to your Solo 401(k) for 2024.
Note (IRS rule): Employer contributions must be pre-tax (traditional) — they cannot be designated as Roth.
Final Factual Answer:
• Maximum employer contribution for 2024:
\boxed{5,611.20}
Thank you so much!
Permalink Submitted by D S on Tue, 2025-03-25 10:13
Based on your self-employment income of $30,190 and your age (over 50), here is the factual bottom-line for tax year 2024:
• Maximum Roth employee contribution: $28,056.02
• Maximum employer (pre-tax) contribution: $5,611.20
• Total maximum Solo 401(k) contribution: $33,667.22
Permalink Submitted by D S on Tue, 2025-03-25 15:46
Please help me Thanks!