2015 Solo 401(K) Contribution Limits

Solo 401(K) Contribution Limits To Increase In 2015

Under the 2015 Solo 401(k) contribution rules, a plan participant under the age of 50 can make a maximum employee deferral contribution in the amount of $18,000. That amount can be made in pre-tax or after-tax (Roth). On the profit sharing side, the business can make a 25% (20% in the case of a sole proprietorship or single member LLC) profit sharing contribution up to a combined maximum, including the employee deferral, of $53,000, an increase of $1,000 from 2014.

For plan participants over the age of 50, an individual can make a maximum employee deferral contribution in the amount of $24,000. That amount can be made in pre-tax or after-tax (Roth). On the profit sharing side, the business can make a 25% (20% in the case of a sole proprietorship or single member LLC) profit sharing contribution up to a combined maximum, including the employee deferral, of $59,000, an increase of $1,500 from 2014.

One of the main benefits of a Solo 401(k) Plan is the opportunity to make higher contributions. Under most retirement plans that an owner only business could establish, the maximum annual deductible contribution is 25 percent of the business owner’s compensation.

Did you know? You cannot have a Solo 401(k) Plan and a SIMPLE IRA at the same time, because the SIMPLE IRA has an exclusive plan rule.


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