What is a Solo 401k annual contribution and profit-sharing limit?
The Solo 401k annual contribution and profit-sharing limit for 2025 is $70,000 (or $77,500 for participants aged 50 and older with catch-up contributions), combining employee deferrals of up to $23,500 and employer profit-sharing contributions of up to 25% of W-2 wages or about 20% of net self-employment income. This dual structure helps self-employed individuals reduce taxable income substantially while building long-term retirement savings. The Traditional 401k pre-tax option provides an immediate income deduction each plan year. Consult IRS Publication 560 for detailed calculation guidance.
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