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Enter your Schedule C profit

Use net profit after ordinary business expenses, but before your own retirement-plan contribution.

YOUR 2026 NUMBERS

Self-employed profit and age

Schedule C net profitProfit after business expenses, before your own SEP / qualified-plan deduction. Age at end of 2026Age 50+ can unlock catch-up contributions; ages 60–63 have a higher 2026 catch-up limit.

Other income and existing retirement contributionsOptional — improves the estimate if these applyOptional +

W-2 wages from another jobUsed for Social Security / Medicare coordination and the federal tax estimate. Eligible self-employed health insuranceOptional. Modeled under the same simplified eligibility scope as our 1099 tax engine. Regular 401(k)/403(b) deferrals already made elsewhereThe $24,500 elective-deferral limit is generally per person, not per plan. Catch-up contributions already made elsewhereOnly relevant when age-eligible for catch-up contributions.

Advanced QBI inputsOptional — mainly relevant at higher taxable incomeOptional +

Specified service trade or business (SSTB)Examples can include health, law, accounting, consulting and certain other service fields. UBIA of qualified propertyUsed only for the QBI wage/property limitation. This owner-only calculator assumes no W-2 wages paid by the business.

✓ $24,500 deferral✓ $72,000 annual-addition cap✓ SEP self-employed worksheetMethodology

Scope: federal 2026, single filer, Schedule C sole proprietor with no common-law employees, one retirement plan, traditional pre-tax contributions. This tool does not model S corporations, partnerships, employee coverage, plan document restrictions, multiple plans of the same employer, Roth contribution tax treatment, mandatory Roth catch-up rules that can apply to certain participants, plan deadlines, state tax, or future taxes on retirement distributions. Planning estimate only.

STEP 2 · RESULT

Your estimated 2026 contribution capacity

A larger contribution can defer more current income tax, but the money remains retirement savings — not free cash.

LARGER ESTIMATED CONTRIBUTION CAPACITYSolo 401(k)

Compare the two plans using your numbers.

Solo 401(k) max deductible contribution$0Employee + employer

SEP IRA max deductible contribution$0Self-employed reduced contribution rate

Solo 401(k) estimated federal tax reduction$0Traditional pre-tax assumption

SEP IRA estimated federal tax reduction$0Includes QBI interaction

How the Solo 401(k) total is builtEmployee, employer and catch-up piecesOpen −

Employee elective deferral	$0
Employer nonelective contribution	$0
Catch-up contribution	$0
Adjusted net earnings after ½ SE tax deduction	$0
QBI deduction before retirement contribution	$0
QBI deduction after Solo 401(k) contribution	$0
QBI deduction after SEP IRA contribution	$0

Tax deferral is not tax elimination. Traditional deductible contributions can reduce current taxable income, but distributions can be taxable later. The calculator estimates current-year federal income-tax reduction only and does not treat retirement contributions as business expenses for self-employment tax.

Why can a Solo 401(k) allow more than a SEP IRA?

A one-participant 401(k) lets the owner contribute in two capacities: employee and employer. The employee elective-deferral limit is $24,500 in 2026, while employer contributions for a self-employed owner use the special self-employed contribution calculation. A SEP IRA generally uses only the employer contribution side.

IRS one-participant 401(k) rules →

What are the 2026 limits?

The 2026 elective-deferral limit is $24,500. The defined-contribution annual-addition limit is $72,000 before catch-up contributions. The regular age-50+ catch-up is $8,000, and participants ages 60–63 have a higher $11,250 catch-up limit. SEP contributions are also subject to the $72,000 2026 maximum.

IRS 2026 retirement-plan limits →

Why is the SEP rate 20% here instead of 25%?

For a self-employed owner, the contribution and the compensation used to calculate it depend on each other. IRS Publication 560 uses a reduced contribution rate. A plan contribution rate of 25% converts to a 20% self-employed rate, applied after the deductible part of self-employment tax.

IRS self-employed contribution calculation →

Why does the QBI deduction change?

IRS QBI guidance treats deductions for qualified retirement-plan contributions attributable to the business as items that reduce QBI. The calculator therefore recalculates QBI instead of treating every retirement dollar as a full taxable-income reduction at your marginal bracket.

IRS QBI guidance →

Solo 401(k) vs SEP IRA Calculator

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