Curious which retirement plan is best for you? Try our quick calculator!
Self-employed individuals and businesses employing only the owner, partners and spouses have several options for tax-advantaged savings including: an Individual 401(k) plan and a SEP IRA. Each option has distinct features and amounts that can be contributed to the plan each year. Use this calculator to estimate the potential contribution that can be made to an Individual 401(k) compared with a SEP plan.
This is based on an income of $0. For sole proprietors, this is the net income from your tax Schedule C or C-EZ. To calculate your maximum contribution, it is assumed that you maximized all business contributions and elective deferrals. The table below summarizes the Individual 401(k) contribution calculation along with SEP IRAs.
*Calculated as net business income of $0 - deduction for Self-Employment Tax of $0 minus employer contribution. This results in the total business profit after self employment taxes and employer contributions to the retirement plan. Maximum earned income allowed is $350,000.
Please select either in sole proprietorship or corporation. The calculations for your contributions are slightly different depending on the business type.
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.
Your current age. For 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.
