Self-directed Solo 401(k)

Self-employed workers and owner-only businesses. The plan stays valid as long as the only people working for the business are the owner and a spouse (or business partners). Once you hire a non-spouse, non-partner employee who works 1,000+ hours a year (or 500+ hours for two consecutive years under SECURE 2.0), the plan has to start covering them and is no longer a Solo 401(k).

Source. IRS, One-participant 401(k) plans.

Yes. If your spouse draws a salary or self-employment income from the business, they can contribute as both employee and employer too, on the same limits. Two participants in the same household can put in well over $140,000 in a single year.

Both options exist with Accuplan. The owner can split employee deferrals between pre-tax and Roth in any combination, up to the combined annual employee limit. SECURE 2.0 §604 also lets the employer profit-sharing side be made as Roth, if the owner chooses. Roth amounts on the employer side show up as taxable wages the year they go in.

Starting in 2026, owners age 50 and over with prior-year FICA wages above $150,000 from the business sponsoring the plan have to make any catch-up contribution as Roth (SECURE 2.0 §603). The rule keys off W-2 FICA wages, so a sole proprietor with self-employment earnings (and no W-2 wages from the business) is generally outside the trigger. Below the wage threshold, the choice is the owner's. IRS Notice 2025-67.

Yes. A Solo 401(k) can let the owner borrow from the account, up to 50% of the vested balance or $50,000, whichever is less. Loans run up to 5 years (longer for a primary-residence purchase) and must be repaid with interest at a market rate. IRAs cannot offer loans, so this is one of the real differences between a Solo 401(k) and a SEP IRA.

Employee deferrals have to be elected by December 31. Employer profit-sharing contributions can be made up until the business federal tax filing deadline, including extensions. The plan itself has to exist by December 31 of the tax year you want contributions for.

Once total plan assets reach $250,000 at year-end, the IRS requires an annual Form 5500-EZ. Below that, no filing is needed. Accuplan tracks the threshold and lets you know when you cross it.

RMDs start at age 73 for anyone who reached age 72 in 2023 or later, and shift to age 75 starting in 2033 (SECURE 2.0 §107). Roth money inside a Roth 401(k) is exempt for the original owner under SECURE 2.0 §325 (effective 2024). Pre-tax balances still have to come out on schedule.

Yes. The Solo 401(k) limits are separate from the personal IRA limit of $7,500 for 2026 ($8,600 with catch-up at 50+). Solo 401(k) participation makes you an active participant in an employer plan, which can affect how much of a Traditional IRA contribution is tax-deductible at higher incomes.

Money pulled from a Solo 401(k) before age 59½ generally owes the standard 10% early-distribution penalty on top of regular income tax (IRC §72(t)). Exceptions exist for disability, separation from service after 55, and a handful of other named situations. The IRS Topic 558 page lists the full set.

The same wide menu as any self-directed retirement account. Real estate, private loans and notes, private equity, precious metals, tax liens, and more. The prohibited transactions list is short.