What this number is
A one-participant 401(k) covers only the owner, or the owner and spouse. The employee hat is the elective deferral: $24,500 in 2026, per person, not per plan. The employer hat is separate. The total is their sum. It is a ceiling from the published worksheet, not a recommendation to contribute, and it does not open an account. The same profit beside a SEP is on the SEP versus solo 401(k) page.
Worked example
Start with $100,000 on Schedule C, line 31, under age 50, with nothing deferred at another job. Profit times 92.35% is a self-employment base of $92,350. Social Security tax is 12.4% of that base, $11,451.40. Medicare tax is 2.9%, $2,678.15. Self-employment tax is $14,129.55, and half is $7,064.775. Net earnings are $92,935.225. Twenty percent of net earnings is $18,587.045.
The page rounds half up only at display. The employer line reads $18,587, the deferral reads $24,500, the total reads $43,087, and room under $72,000 reads $28,913. The deferral is not subtracted before the 20%.
Why the formula
Publication 560 turns a 25% plan rate into a self-employed rate of 0.200000. Employer contributions other than elective deferrals cannot exceed 20% of net earnings, figured without deducting the contributions for yourself. The worksheet then keeps the smallest of that 20%, 25% of the $360,000 compensation cap ($90,000), the room left under $72,000 after the regular deferral, and half of net earnings remaining after the deferral. Publication 560 reaches that answer with the rate table and then the Deduction Worksheet for Self-Employed. It does not solve the loop by iteration.
At $100,000 the 20% figure is the smallest. At $40,000 it is not. Net earnings are about $37,174, and 20% of that is about $7,435. A full $24,500 deferral leaves less than that, so the employer line is half of what remains, $6,337.
Catch-up uses the age attained during 2026. Under 50 it is zero. Turning 50 through 59, or 64 or older, adds $8,000. Turning 60, 61, 62, or 63 adds $11,250. Catch-up comes only from earnings left after the employer piece and the regular deferral, and it does not reduce room under $72,000. At $250,000 of profit the wage base caps Social Security tax, the employer line shows about $47,043, and the 60–63 band shows a deferral of $35,750 with the same room, about $457.
Deferrals already made count elective deferrals this year, including catch-up. The first $24,500 uses up the regular deferral. Anything above that uses up catch-up. At $100,000 of profit, someone who turns 55 and has already deferred $24,500 at a job shows a catch-up of $8,000 and an employer piece still about $18,587.
Common mistakes
- Calling the ceiling 25% of profit, or 25% plus $24,500, without taking half of self-employment tax off first.
- Reading the 2025 dollars on the Publication 560 worksheet ($23,500, $70,000, $350,000) as the 2026 limits. Notice 2025-67 puts those caps at $24,500, $72,000, and $360,000.
- Folding catch-up into the $72,000 cap, or forgetting that a W-2 deferral shares the employee limit.
A negative profit has no contribution ceiling, and the four lines show $0. Profit under the Schedule SE $400 stop has no self-employment tax, so net earnings stay equal to the profit and the deferral cannot exceed them.
W-2 Social Security wages are assumed to be zero. They use up the $184,500 wage base before the 12.4% tax, so a W-2 job can lower Social Security tax on the Schedule C profit and change the employer piece. Additional Medicare tax of 0.9% is not subtracted. Catch-up has the same dollar ceiling whether it is pre-tax or Roth. The $150,000 prior-year FICA-wage rule in Notice 2025-67 changes only the tax character, and a sole proprietor with no W-2 from the sponsoring business is not treated as having met it.
Form 5500-EZ
The IRS one-participant page, checked on 2026-11-04, says a one-participant 401(k) generally files Form 5500-EZ if assets are $250,000 or more at year-end, and that fewer assets may mean no filing. The instructions served that day were the 2025 edition, dated July 7, 2025. They add three rules this page states together. The $250,000 test adds the assets of every one-participant plan the employer maintains. If the combined assets exceed $250,000, every such plan files, including one under $250,000. The final plan year is filed even when assets are at or under $250,000.
Questions and answers
How much can a sole proprietor put in a solo 401(k) for 2026?
At $100,000 of Schedule C profit, under 50, the lines are a $24,500 deferral, about $18,587 from the business, and a total of $43,087.
Which age uses the $11,250 catch-up?
A person who turns 60, 61, 62, or 63 during 2026. Ages 50 through 59, and 64 or older, use $8,000. Under 50, catch-up is zero.
Do deferrals at a W-2 job reduce the employer contribution?
They use up the employee limit. At $100,000 of profit and age 55, $24,500 already deferred leaves an $8,000 catch-up and an employer piece of about $18,587.
Does catch-up count toward the $72,000 cap?
Catch-up is outside that cap, so the deferral can sit above $24,500 while room under $72,000 is $0.
Other tools
The SEP versus solo 401(k) calculator puts both ceilings on one profit. The QBI calculator uses half of the same self-employment tax as a reduction to the deduction base. About names the person writing this and the estimates the site will not make.
Sources
Checked 2026-11-04. Publication 560 for the rate table and the self-employed worksheet. Notice 2025-67 for the 2026 dollar limits. The SSA 2026 fact sheet for the $184,500 wage base. The Schedule SE page inside Publication 560 still prints the 2025 wage base. The one-participant 401(k) page is the Form 5500-EZ source, read with the 2025 instructions online that day. Planning estimate, not tax advice. No signup, no brokerage funnel.