Taxes · 2026 limits

Retirement contributions

Compare SEP and solo 401(k) contribution capacity, plus an illustrative tax benefit.

Example amounts. Replace with your numbers.

Your contribution capacity

How this business is taxed

Annual business profit

Before your retirement deduction. Assumes one business and no other self-employment income.

Age at the end of 2026

My business has eligible non-owner employees

Contributions at other jobs

Social Security wages from other jobs

Used only to calculate the deductible half of self-employment tax.

Regular employee deferrals at other jobs

Expected total for 2026, including pretax and Roth 401(k)/403(b) deferrals, excluding catch-ups. Not employer contributions or governmental 457 deferrals.

Illustrate a tax deduction

Plan for the illustration

Planned pretax contribution

Use an amount within the displayed base plan limit. Roth and catch-up contributions are excluded from this tax illustration.

Assumed federal marginal tax rate (%)

A fixed-rate illustration. Actual savings change with brackets, QBI limits and other deductions.

QBI deduction effect

SEP contribution capacity

$22,304

2026 modeled annual limit; not remaining room after contributions already made to this business’s plan.

Solo 401(k), before catch-ups: $46,804
Potential catch-up capacity: $0

Solo employee deferral: $24,500
Solo employer contribution: $22,304
Solo total including catch-up: $46,804

SEP and solo 401(k) amounts are alternatives, not amounts to add together. Plan terms, eligible compensation and other plans can reduce these limits.

Illustrative federal tax reduction$3,840

$20,000 × 24% × 80% after assumed QBI offset. This is not a full tax calculation or a guaranteed tax saving.

How this estimate works

2026 limits: $24,500 regular employee deferrals; $72,000 combined base contributions; $360,000 compensation cap. Catch-ups are $8,000 at ages 50–59 and 64+, or $11,250 at ages 60–63, if the plan permits.

For a sole proprietor, the model deducts half of regular self-employment tax and applies the reduced employer contribution rate plus the self-employed worksheet compensation limit. For a corporate owner it uses eligible W-2 compensation. Other plans of the same or a related employer, plan deadlines, existing contributions, employee coverage and controlled-group rules need individual review.

Catch-up contributions may have to be Roth under 2026 rules; they are excluded from the tax-savings illustration. No self-employment tax reduction is assumed for retirement deductions. S-corp QBI interactions depend on the type of contribution; choose the appropriate illustrative offset with your adviser.

IRS 2026 limits · IRS solo 401(k) rules · IRS contribution worksheets

Your contribution capacity

Put your numbers into a plan.