Self-employed individuals and businesses employing only the owner, partners and spouses have several options for tax-advantaged savings: an Individual 401(k) plan, a SEP IRA, a SIMPLE IRA, or a Profit Sharing plan. Each option has distinct features and amounts that can be contributed to the plan each year. Use the Individual 401(k) Contribution Comparison to estimate the potential contribution that can be made to an Individual 401(k) compared to Profit Sharing, SIMPLE, or SEP plan.
Individual 401(k) Contribution Comparison
Individual 401(k) Contribution Comparison Definitions
- Business type
- Please select either in sole proprietorship or corporation. The calculations for your contributions are slightly different depending on the business type.
- Net income
- For sole proprietors, this is your net income from your tax Schedule C or C-EZ. For single owner corporations with no employees other than yourself or your spouse, this is your w-2 wages.
- Current age
- Your current age. For SIMPLE and Individual 401(k) plans you are able to make additional contributions, known as 'Catchup Contributions' if you are age 50 or older by the end of the year. For 2020, Individual 401(k) plans allow for an additional $6,500 while SIMPLE IRAs allow for an additional $3,000 contribution.