Based on your numbers, a Solo 401(k) saves you {{ extraTaxFmt }} more per year in taxes than a SEP IRA.
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extra sheltered each year
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tax savings over 5 years
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over 10 years, before compounding
Your best fit: SEP IRA
With {{ cashFmt }} available to contribute, the SEP IRA delivers the same tax savings — with far less paperwork.
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sheltered each year
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tax saved per year
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setup & admin — one simple form
The Solo 401(k)'s extra deferral room only pays off if you have the cash flow to use it. Raise the slider below to see where it starts to win.
Your best fit: SEP IRA
With W-2 employees on payroll, a Solo 401(k) isn't available — the SEP IRA is your plan.
Solo 401(k)s are limited to owner-only businesses (a spouse on payroll is fine). Note: with a SEP, eligible employees generally must receive the same contribution percentage you give yourself — let's talk through the details.
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W-2 employees other than you or a spouse?
What you could actually shelter this year
SEP IRA
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Solo 401(k)
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Employer contribution (25% of W-2)Employee deferral — Solo 401(k) onlyRoom your cash flow doesn't reach yet
SEP tax saved / yr
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Solo 401(k) tax saved / yr
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Costs — what's the catch?
Both plans are free to open and run at Fidelity or Schwab. Add Roth or loan features to a Solo 401(k) via a paid administrator and it runs $125–$300/yr. A short Form 5500-EZ applies only after Solo 401(k) assets pass $250K. SEP IRAs have no filing requirement.
What else does the Solo 401(k) unlock?
A Roth option for tax-free growth · loans up to $50K · +$8,000 catch-up at age 50 ($11,250 at ages 60–63) · accepts rollovers from IRAs and old 401(k)s. The SEP offers none of these. The SEP's edge: near-zero paperwork and no eligibility restrictions.
Does my business profit change the limits?
No — for an S-Corp, contribution limits are based on your W-2 salary, not business profit. Profit determines the cash you have available to fund the contribution, which is why the cash-flow slider above can change the recommendation.
2026 limits used in this calculator
Employee deferral: $24,500 · Combined employee + employer cap: $72,000 · Employer piece: 25% of W-2 wages (both plans) · Catch-up at 50+: $8,000 (must be Roth if prior-year wages exceeded $150K). Source: IRS, 2026 cost-of-living adjustments.
This tool is an illustration for planning conversations — not tax, legal, or investment advice. Your situation may differ; contact Elev8 Tax & Accounting to review your specific numbers before choosing a plan.