Contributions

As an S-Corp, maximize your Solo 401(k) by contributing as employee and employer. Employee contributions come from your W-2 salary via Traditional or Roth options. Employer contributions are pre-tax profit-sharing based on your salary, lowering corporate taxable income.

Employee
Tax treatment i
Employer
Tax treatment
Traditional (Pre-Tax)
Employee  /$24,500 i
Employer  /$20,325 i

Pro-Tip: Fill your Employee bucket before using Employer Profit-Sharing. This maximizes your tax advantages (Traditional or Roth) at lower salary levels and keeps your payroll taxes optimized.

Employer / Employee

As an S-Corp, maximize your Solo 401(k) by contributing as employee and employer. Employee contributions come from your W-2 salary via Traditional or Roth options. Employer contributions are pre-tax profit-sharing based on your salary, lowering corporate taxable income.

How would you like to split your goal of $33,000?

Employee  /$24,500 i
Employer  /$20,325 i

Pro-Tip: Fill your Employee bucket before using Employer Profit-Sharing. This maximizes your tax advantages (Traditional or Roth) at lower salary levels and keeps your payroll taxes optimized.

Employee contribution tax treatment

While the employer contribution is always Traditional (Pre-Tax), you get to choose the contribution type for the employee part.

Traditional (Pre-Tax): Contributions lower your taxable income today. You pay no taxes now, but your future retirement withdrawals will be taxed as ordinary income. Best if you are in a high tax bracket now and expect your tax rate to decrease in retirement.