Solo 401k Deadlines

Eligibility

As long as there are no non-owner employees, most self-employed individuals, business owners, and couples running a business together are eligible to open a Solo 401k. More info can be found here, or for questions specific to your situation check with your CPA or tax professional.

Contribution limits

In 2024, the maximum contribution is $23,000 as the employee, plus an additional 25% of compensation as the employer. The total contribution limit is $69,000, plus an additional $7,500 catch-up contribution for those 50 or older.

In 2025, the maximum contribution is $23,000 as the employee plus an additional 25% of compensation as the employer. The total contribution limit is $70,000, plus an additional $7,500 catch-up contributions for those 50 or older.

More information on how to make a contribution in your Solo 401k can be found here and calculating your contribution limit here.

Plan options

Solo 401ks offer both Pre-Tax and Roth accounts, each with its own tax advantages. Here’s a step by step guide to setting up a Solo 401k with Carry.

You also have the option to do a Solo 401k Mega Backdoor Roth conversion which you can learn more about here.

Since we need to process your Solo 401k application, our deadlines vary based on different circumstances:

• Opening a new Carry Solo 401k plan and making a contribution election (Deadline: December 31 by Midnight)

  • That means if you set it up yourself you’re good for the year, as long as you make an election

• Transferring or opening a Solo 401k plan that falls under any of these categories (Deadline: Tuesday, Dec 24 - 5 days before the IRS deadlines)

  • Spousal Plan (adding a spouse to an existing Solo 401k, creating a new Solo 401k with your spouse)

  • Plan Transfer or Restatement (moving a plan document from another provider; note that this only moves the plan document, and any funds can take a period of weeks to roll over, depending on the outgoing custodian’s processes and requirements)

We recommend setting up your Solo 401k at the latest by least Dec 24 (5 days before the IRS deadline) to avoid any typical delays in various steps of the process. These include:

• Any questions you have during the setup process, that require a response from our support team (support@carry.com) or your accountant or tax professional

• Transferring a plan, restating a plan, or adding a spouse to your Solo 401k plan

This gives you buffer time to navigate the process without the stress of a looming deadline.

Contribution Election and funding Deadlines:

There are different deadlines for opening, deciding how much to contribute to, and depositing funds in a Solo 401k.

These rules are complex, so we recommend checking with an accountant or tax advisor familiar with your situation if you have any questions.

• New plans

  • If you are a Sole Proprietorship or a Single Member LLC taxed as a Sole Proprietorship, and if you have never had a Solo 401k plan or a 401k plan for your self employment, you have until your tax filing due date, without extensions, to open a Solo 401k plan. This means that you can “retroactively” open a Solo 401k plan for the prior year, as long as the tax filing due date for that year has not passed. You have until your tax filing due date without extensions to contribute funds for the prior year.

  • For all business types, you have until your tax filing due date with extensions to open a Solo 401k plan for the prior year, however you will not be able to contribute employee pre-tax or employee Roth salary deferral contributions for the prior year.
    

• Existing plans

  • You have until December 31st of each year to “elect” how much in employee pre-tax or employee Roth salary deferral contributions.

  • You have until your personal and business, if applicable, tax filing due date, with extensions, to decide how much in employer pre-tax (also referred to as employer pre-tax profit-sharing contributions) or employee optional after-tax (“mega backdoor Roth”) contributions you want to make.

  • All contributions must be funded (deposited in) the Solo 401k plan by your personal and business, if applicable, tax filing due date with extensions.

    • Keep in mind that if you are paid on a W2 from your own business, any employee pre-tax or Roth contributions will likely need to be reflected on the W2. Check with your payroll provider or accountant for any timeline or deadlines related to issuing a W2 or correcting a W2.
      

• EACA credit

  • The EACA language must be included in your plan document before the end of the year (December 31) in order to claim the credit for that year.

What is a Solo 401k election?

A Solo 401k election is simply a written form or document for how much in employee contributions (aka “employee elective salary deferrals”) you want to make, and to which accounts it should go towards (pre-tax or Roth). In most cases, the election should be made prior to your salary or compensation being paid out.

Since you are the employer and employee, you’re essentially writing a signed, dated note to yourself on the amounts you are going to contribute as an employee, and keeping it on file yourself for your own records, in case the IRS ever asks for it.

If you’re a Carry Solo 401k user, you can find an electronic contribution election form inside your Carry account by going to Solo 401k → the Contributions tab at the top.

Why is it important?

A written election can help you clearly establish that your plan is operating in compliance with the tax code. It can also help you plan ahead and ensure you do not accidentally over-contribute.

What if I make a Solo 401k election but don’t make the full contribution by the deadline?

That is completely fine. You are allowed to contribute less than your elected amount (but not more). The elections are typically maintained for audits and to prove that you do intend to contribute, and that you do not contribute more than you claim. However, your actual contributions will be the amounts used to reconcile for tax purposes, and are what should be included on your filed tax return.

How do I make a Solo 401k election?

A simple signed, dated note to yourself with the different amounts you want to contribute is usually sufficient. Inside Carry you can find an electronic contribution election form, which you can download and print as well from the Documents section (click your profile icon in the top right → Documents).