Solo 401(k) owners must understand the contribution deadlines and planning rules that apply to their plan each year. These rules determine how much you can contribute, when contributions must be made, and whether your plan must already be established to take advantage of those contributions.
This article walks through the three most important Solo 401(k) deadlines and planning considerations for 2025 contributions, including entity-specific rules for S corporations, sole proprietors, and partnerships. Whether you already have a Solo 401(k) or are considering setting one up, understanding these rules can make a substantial difference in both retirement savings and tax reduction.
A Solo 401(k) is a retirement plan for self-employed individuals and small business owners who have no full-time employees other than a spouse or business partner. One of the biggest advantages of a Solo 401(k) is the ability to contribute significantly more than a traditional IRA while retaining the ability to self-direct into real estate, private companies, LLCs, notes, funds, and other alternative investments.
2025 Contributions Can Be Made in 2026
Both employee and employer Solo 401(k) contributions for 2025 may generally be made up to the business’s tax return filing deadline, including extensions, depending on the business entity.
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Sole proprietorships and single-member LLCs (Schedule C):
April 15, 2026 (extensions available for employer contributions) -
S-Corporations and partnership LLCs:
March 16, 2026 (extensions available)
This extended contribution window is one of the most valuable features of a Solo 401(k), allowing business owners to make prior-year contributions well into the following year once cash flow is clearer.
Special Rule for Sole Proprietors
For sole proprietors (Schedule C income), employee deferrals must be made by April 15, 2026, and extensions do not apply. Employer contributions may still be made later if a valid extension is filed.
W-2 Reporting and Employee Deferrals Require Early Planning
If your business is an S-Corporation, employee deferrals require additional coordination.
W-2s must be issued by January 31, 2026, and employee deferrals must be properly reflected on the W-2 (Box 12). Because of this, you must either:
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Make the employee contribution before January 31, or
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Determine the deferral amount in advance so payroll and W-2 reporting are accurate
Even if the funds are not yet available, the deferral can still be elected and funded later by the tax filing deadline (including extensions).
Failure to properly report employee deferrals on the W-2 can jeopardize the contribution.
Example
Now let’s bring this all together and look at an example outlining how this may work. Sally is 44 years old and has an S-Corporation for her online business. She is the sole owner and only employee and had a new Solo 401(k) established in 2025. She has $120,000 in net income for the year and will have taken $50,000 of that in wage income that will go on her W-2 for the year. That will leave $70,000 of profit that is taxable to her and that will come through to her personally via a K-1 from the business. Sally has not yet made any 2025 401(k) contributions but plans to do so in order to reduce her taxable income for the year and to build a nest egg for retirement. If she decided to max out her 2025 Solo 401(k) contributions, it would look like this:
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- Employee Contributions – The 2025 maximum employee contribution is $23,000. This is dollar for dollar on wages so she can contribute $23,000 as long as she made $22,500. Since Sally has $50,000 in wages from her S-Corp, she can easily make a $23,000 employee contribution. Let’s say that Sally doesn’t have the $22,500 to contribute but will have it available by the tax return deadline (including extensions). What Sally will need to do is let her accountant or payroll company know what she plans to contribute as an employee contribution so that they can properly report the contributions on her payroll and W-2 reporting. By making a $22,500 $23,000 employee contribution, Sally has reduced her taxable income on her W-2 from $50,000 to $27,500. This assumes she made a traditional contribution. Roth employee contributions would not reduce the taxable income on the W-2. At even a 30% tax bracket for federal taxes and a 5% tax bracket for state taxes that comes to a tax savings of $7,875.
Example Summary for Sally:W-2 Wages Employee Contribution to Traditional Solo 401(k) Income Taxes Due (35%) $50,000 $0 $17,500 $50,000 $23,000 $9,450 Tax Savings from Employee Contribution: $8,050
If Sally instead made employee Roth contributions, she would not get the tax deduction but would be building a Roth account that would come out tax-free at retirement. If Sally chooses Roth, she would be reaping the tax benefit later in retirement as she would have no taxes due on distributions from the Roth accoun
- Employer Contributions – The 2023 maximum employer contribution is 25% of wage compensation not to exceed $66,000 in total. Since Sally has taken a W-2 wage of $50,000, the company may make an employer contribution of $12,500 (25% of $50,000). This contribution is an expense to the company and is included as an employee benefit expense on the S-Corporation’s tax return (form 1120S). In the stated example, Sally would’ve had $70,000 in net profit/income from the company before making the Solo 401(k) contribution. After making the employer matching contribution of $12,500 in this example, Sally would then only receive a K-1 and a net income/profit from the S-Corporation of $57,500. Again, if she were in a 30% federal and a 5% state tax bracket, that would create a tax savings of $4,375. This employer contribution would need to be made by March 15th, 2023 (the company return deadline) or by September 15th, 2023, if the company were to file an extension. In the end, Sally would have contributed and saved $35,000 for retirement ($22,500 employee contribution, $12,500 employer contribution). And she would have saved approximately $12,250 in federal and state taxes between her employee and her employer contributions. That’s a win-win.
Example Summary for Sally’s Business:
- Employee Contributions – The 2025 maximum employee contribution is $23,000. This is dollar for dollar on wages so she can contribute $23,000 as long as she made $22,500. Since Sally has $50,000 in wages from her S-Corp, she can easily make a $23,000 employee contribution. Let’s say that Sally doesn’t have the $22,500 to contribute but will have it available by the tax return deadline (including extensions). What Sally will need to do is let her accountant or payroll company know what she plans to contribute as an employee contribution so that they can properly report the contributions on her payroll and W-2 reporting. By making a $22,500 $23,000 employee contribution, Sally has reduced her taxable income on her W-2 from $50,000 to $27,500. This assumes she made a traditional contribution. Roth employee contributions would not reduce the taxable income on the W-2. At even a 30% tax bracket for federal taxes and a 5% tax bracket for state taxes that comes to a tax savings of $7,875.
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Under the Secure Act 2.0, you can make employer Roth contributions. The IRS finally released guidance on explaining how to report employer Roth 401k contributions in IRS Notice 2024-2. When making an employer Roth contribution, the company takes the deduction as an employee benefit expenses and then the plan issues a 1099-R to the employee so that in the end there is no tax deduction and that funds are taxed (via the 1099-R) and thus the result is post-tax Roth funds. In the case of a Solo 401(k) owner, you get a deduction for the contribution in your business on the company return and then you pick up a 1099-R of income for the amount of the contribution (similar to if you made a Roth conversion). The net result if you took a deduction in the business and picked up that same amount of income on your personal return. If that just sounds like a Roth conversion of a traditional employer contribution, well, you’re right. It is the exact same process and outcome. The IRS did clarify that there is no FICA on employer Roth contributions and as a result they are not reported on the W-2.
Keep in mind, you need to start making plans now, and begin coordinating with your accountant or payroll company as your yearly wage information on your W-2 (self-employment income for sole props) is critical in determining what you can contribute to your Solo 401(k).
Solo 401(k) Plan Set-Up Deadlines to Make Contributions for 2023
For S-Corp owners, you must have your Solo 401(k) plan set-up by December 31, 2023 in order to make the full 2023 contribution of $66,000, and to ensure your Employee Contribution is reported on form W-2 which is due January 31st, 2024. The total $66,000 contribution limit consists of $22,500 in employee contributions and $43,500 in employer contributions. For s-corp owners, if you do not have the plan set up by December 31, 2023, you technically cannot make employee contributions as you weren’t able to elect an employee deferral in 2023.
You can set up your solo 401(k) after December 31, 2023, and still make 2023 employer contributions. The Secure Act, which went into law in 2019, allows you to set up your solo 401(k) by the adopting employer’s tax filing deadline and still make your employer contribution. This timeline includes extensions for all adopting employer entities except for sole proprietorships who in an odd rule change in Secure 2.0 can only set-up by April 15 for prior year contributions. So, if you set up your solo 401(k) plan on February 1, 2024, you can still make your employer contributions for 2023, which could be up to as much as $43,500 depending on your wage or self-employment income. Also, if you extended your 2023 business return from March 15th to September 15th (s-corp or partnership) your deadline to establish a new solo 401(k) plan and to make 2023 employer contributions is September 15, 2024.
For sole proprietors (single member LLCs) their deadline to establish the Solo 401(k) plan and still make contributions is not December 31, 2023. Instead, for Sole proprietors the deadline is the company tax return deadline (without extension) so you would have until April 15, 2024 to establish the plan and make 2023 contributions.
Keep in mind that while IRAs can be established until April 15th, 2024 for 2023 contributions, a solo 401(k) should be established for S-Corp owners (and c-corp owners) by December 31st, 2023 if you want to make both employee and employer contributions for 2023. Don’t get the IRA and solo 401(k) deadlines confused and make sure you’ve got a plan for your specific business. Also, remember the deadline is different for sole proprietorships and general partnerships as they have until the company return deadline to establish the plan and make new contributions.
We can help in establishing your solo(k) at KKOS Lawyers using our IRS pre-approved solo(k) plan documents where you can self-direct the solo(k) and have checkbook control right out of the plan. We handle statements and reporting as well as IRS-required plan document updates for your solo 401(k) at Directed Trust Company.
Click here to learn more about setting up a Solo 401k at Directed Trust Company.
