Great! So the "employer" portion of the solo 401k contributions would be $54,000 - $24,000 - $4800 (employer contribution) = $25,200? You mean I can put that amount into the solo account, and I can take a deduction for that??
Also -- I have been saying "401k" here in the thread . . . but it is actually a 403. Does that make any difference for this?
Thank you!!
The "employer" portion of solo (individual) 401K contributions are typically capped at 20% of your net self employed income. Also called "profit sharing".
The $54K figure you quoted I'm guessing is the all sources contribution limit for a 401K account, which doesn't include the catch up $6K allowed = total $60K.
That $54K ($60K) limit isn't a global limitation. The $18K ($24K) personal contribution deductible limit is a global limit.
I have maybe a similar situation. I have a regular wage job where I max out my 401K account: $59K this year including the employer match.
I also have a small side gig, sole proprietor with ~$15K schedule C income. I have an individual 401K account opened at Schwab as a retirement
account for my side gig. It has a couple IRA's I rolled into it to facilitate backdoor Roth conversions and I usually put ~$1K per year of "profit sharing"
into it from my side business, but I have never made an employee contribution to it. I always use up my full deductible limit on my regular job 401K
contributions.
Do your own due diligence and don't rely on any internet posts. There is a small bit of paperwork hassle initially opening a Solo 401K and once
the balance exceeds $250K there is an annual reporting requirement. There are easier small business retirement plans and also ones that allow
more room for contributions. I settled on the individual 401K because it met my level for sheltering income and facilitating backdoor Roths. Your
needs might be different.