Solo 401(k) vs. SEP IRA: Which Puts More Away in 2026

Описание: A SEP IRA gives a sole proprietor about 20% of net earnings from self-employment. A solo 401(k) gives the same 20% plus an elective deferral of up to $24,500 for 2026 — so it puts away more at every income level until both reach the $72,000 annual additions ceiling.

Both plans use the same 20% employer formula for a sole proprietor. Only one of them lets you add an elective deferral on top — and that deferral is the entire difference.

CHAPTERS
0:00 Why this is not a close contest
0:50 The 2026 limits for both plans
1:52 The 20% that trips everyone up
3:00 A worked example at $120,000 of profit
4:20 Where a SEP is still the right answer
5:30 Deadlines and how to set one up

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THE WRITTEN VERSION
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Surya Padhi, CPA, EA — Sure Financial and Tax Services LLC
Certified Public Accountant · IRS Enrolled Agent · Certifying Acceptance Agent
Hillsborough, New Jersey · 908-955-0696 · [email protected]
https://suryapadhiea.com

This video is general tax education and does not constitute individualized tax, legal or financial advice. Figures are stated for tax year 2026 and are subject to IRS adjustment. Consult a qualified professional about your own facts.
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*Tags:*

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solo 401k, sep ira, self employed retirement, one participant 401k, retirement plan limits 2026, schedule c, small business taxes, elective deferral, self employment tax, enrolled agent, cpa
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