2026 tax year
Self-employed retirement calculator
A solo 401(k) lets a freelancer shelter far more than a regular IRA, here's how much.
Self-employment comes with the most generous retirement accounts in the code. A solo 401(k) or SEP-IRA lets you contribute as both employee and employer, well beyond the $7,500 IRA limit. And the contributions are deductible. This works out your 2026 limit from your net profit and age.
Schedule C net profit.
Catch-ups start at 50; 60 to 63 get more.
Enter your net profit and age.
Worked example, $100,000 of net profit at 40
A freelancer with $100,000 of Schedule C profit, under 50:
| Component | Amount |
|---|---|
| Net self-employment earnings (after ½ SE tax) | $92,935 |
| Solo 401(k) employee deferral | $24,500 |
| Employer profit-sharing (≈20%) | $18,587 |
| Solo 401(k) total | $43,087 |
| SEP-IRA total (employer piece only) | $18,587 |
The solo 401(k) reaches $43,087, the $24,500 employee deferral plus $18,587 employer piece, while the SEP, which has no deferral, tops out at $18,587. At this income the solo 401(k) shelters $24,500 more, and every dollar cuts this year's taxable income.
Questions
Solo 401(k) or SEP-IRA?
At low-to-mid incomes the solo 401(k) wins, because it adds a flat employee deferral (up to $24,500 in 2026) on top of the ~20%-of-earnings employer piece, a SEP only has the employer piece. At very high incomes both hit the same $72,000 cap. The SEP is simpler to open and has no annual filing until assets are large.
How is the employer contribution calculated?
For the self-employed it is 20% of net self-employment earnings, your profit minus half your self-employment tax. That 20% is the equivalent of a 25% plan rate once the contribution's own effect is backed out. The calculator does this adjustment for you.
What are the 2026 catch-up rules?
At 50 to 59 the solo 401(k) employee deferral rises by $8,000, lifting the combined cap to $80,000. A special window at ages 60 to 63 adds $11,250 instead, for a combined $83,250. At 64 and up the standard 50+ catch-up applies again.
When must I set it up and fund it?
A solo 401(k) generally must be established by December 31 of the tax year to make an employee deferral, though the employer piece can be funded up to the filing deadline. A SEP can be both opened and funded up to the filing deadline including extensions, useful if you are deciding after year-end.
Related tools
- 1099 tax calculator the profit these limits build on
- S-corp calculator another way to cut SE tax
- Saver's credit a bonus for lower-income savers
Contribution estimate for the 2026 tax year. Plan-specific rules and compensation limits can apply. Not tax or investment advice.