What are the Solo 401(k) contribution limits?
There are two separate allowable contribution types. For 2014 the employee contribution is limited to 100% of the first $17,500 of income. For business owners over the age of 50 there is an additional $5,500 ‘catch-up’ contribution for a total of $23,000. In 2015 the contribution limit is $18,000 with a $6,000 catch-up contribution for owners 50 and over for a total of $24,000. The employer contribution is limited to 25% of W-2 compensation if the business is incorporated or 20% of self-employment income if the business is a sole proprietorship. The business owner has contribution flexibility in that, each year, he can choose whether to make the employer contribution. Total plan contribution limits are the lesser of 100% of compensation or $52,000 for 2014 and $53,000 for 2015. (plus a $5,500 catch-up contribution if age 50 or older).