Solo 401(k) Contributions

At New Direction Trust Company, Solo 401(k)s are only available to self-employed individuals with no other employees. This allows an account holder to make employee contributions (for a personal tax benefit) and employer contributions (for a business tax benefit) to the same Solo 401(k). In some cases, these contributions will bear the same tax advantages of a Traditional IRA - You defer contributions from your annual income for tax purposes. In other cases, your plan document may allow post-tax Roth contributions (employee contributions only), enabling you to build a tax-free portfolio for the long haul. Your one Solo 401(k) may even permit both types of contribution, again depending on the plan document.

Contribution Deadlines & Annual Limits

Employee Contributions

Tax Year	Annual Contribution Limit (below age 50)	Annual Contribution Limit (age 50 or above)	Contribution Deadline
2019	100% of Compensation up to $19,000	100% of Compensation up to $25,000	December 31st or the year's final paycheck
2018	100% of Compensation up to $18,500	100% of Compensation up to $24,500	December 31st or the year's final paycheck

Employer Contributions

Tax Year	Annual Contribution Limit	Contribution Deadline
2019	25% of Compensation up to $37,000	April 15th, 2020 (plus extensions)
2018	25% of Compensation up to $36,500	April 15th, 2019 (plus extensions)

By making employee and employer contributions to the same Solo 401(k), you may contribute up to $56,000 ($19,000 employee + $37,000 employer) in 2019 if you're under age 50 ($55,000 in 2018). You may contribute up to $62,000 ($25,000 employee + $37,000 employer) in 2019 if you're age 50 or above ($61,000 in 2018).