Retirement Tax Shelter IRC § 401(k) / § 408(k)

Solo 401(k) vs. SEP IRA Contribution Calculator

Maximize your tax-deferred retirement shelter as an S-Corp Owner, 1099 Contractor, or Solo Consultant.

Entity Structure

S-Corp W-2 Salary ($ / Year)

Employer profit sharing is calculated as 25% of this W-2 figure.

Owner Age (Catch-Up Contributions)

Effective Marginal Tax Rate (%)

32%

Combined Federal + State tax bracket to estimate upfront cash savings.

Expected Annual Return on Investment (%)

Years to Retirement

Maximum Tax Shelter

Employee Deferral: $23,000

Employer Profit Sharing: $30,000

Max Annual Contribution: $53,000

Estimated Upfront Tax Savings: $16,960 / yr

Employer-Only Contribution

Employee Deferral: $0 (Not Permitted)

Employer Profit Sharing: $30,000

Max Annual Contribution: $30,000

Estimated Upfront Tax Savings: $9,600 / yr

Solo 401(k) Extra Annual Tax Shield Advantage

You can shield an additional $23,000 / year more in a Solo 401(k) than in a SEP IRA at this salary.

+$7,360 Tax Saved

Solo 401(k) vs. SEP IRA compounding over your investment horizon.

20-Year Horizon

Projected Solo 401(k) Nest Egg

$2,624,592

Projected SEP IRA Nest Egg

$1,485,996

Feature	Solo 401(k)	SEP IRA
Employee Contribution Allowed?	Yes (Up to $23,000 / $30,500)	No ($0)
Roth (Post-Tax) Option?	Yes (Roth Solo 401k + Mega Backdoor)	Limited (SECURE 2.0 partial)
Participant Loan Provision?	Yes (Borrow up to $50,000)	No (Prohibited transaction)
Backdoor Roth Compatibility	100% Clean (No Pro-Rata Rule)	Triggers IRA Pro-Rata Rule
Annual IRS Filing	Form 5500-EZ (Only once assets > $250k)	None Required