Made More than Expected? Here’s How Much You Can Still Put into Retirement

For 2026, a Solo 401(k) allows up to $72,000 in combined employee and employer contributions, including up to $24,500 in employee deferrals. A SEP-IRA allows employer contributions only. Your entity, compensation, contributions to date, and available business cash set your number. For S-Corp owners, salary sets the Solo 401(k) vs. SEP-IRA limits, and deferral elections close with the last 2026 payroll run.

You made more than you expected this year, which is a good problem to have... until you have to decide what to do with the money. A retirement contribution lowers this year's tax bill, but every dollar the business contributes is cash it no longer has for payroll or taxes.

For S-Corp owners, the deferral side of that decision closes with the last 2026 payroll run. The numbers you need sit in three places, your books, your payroll reports, and the tax projection held by whoever handles your return.

So, how much can you put into retirement this year without leaving the tax bill or the business short?

How Is Your Business Taxed?

Your tax treatment decides what counts as compensation, and your compensation sets the limit. Two owners with the same profit can end up with different numbers.

The 20% for sole proprietors and partners looks smaller than the S-Corp's 25%, but it works out to the same rate. IRS Publication 560 has you apply 20% to net earnings because your contribution comes out of those same earnings.

In a partnership, a Solo 401(k) works as long as the only people in the plan are you, your partners, and your spouses.

Own an S-Corp but haven't run payroll this year? Then you have no wages to defer from and nothing to base an employer contribution on until payroll starts.

How Does a Solo 401(k) Differ from a SEP-IRA?

The difference comes down to the employee deferral, up to $24,500 for 2026, which a Solo 401(k) allows and a SEP-IRA doesn't.

The comparison assumes no employees besides you and your spouse. Once someone else qualifies for coverage, a Solo 401(k) no longer fits, and you would need a standard 401(k) that covers them. A SEP-IRA can still work, but it has to give each eligible employee the same percentage of pay you give yourself.

With employees in the picture, the question becomes what each plan costs across your whole team as well as what it lets you put away.

Until the employer percentage reaches $72,000 on its own, the deferral is the reason a Solo 401(k) holds more.

What Changes When You Have a Bigger Year?

A bigger year raises your tax bill and changes your available cash, but it doesn't always raise your contribution limit.

Take a 45-year-old consultant who runs an S-Corp with no employees. The January forecast called for $400,000 of net profit after the owner's salary and payroll taxes. Then a client signed a fourth-quarter project, and the forecast jumped to $520,000.

The consultant already contributes pre-tax to a Solo 401(k) from a $150,000 W-2 salary, paid monthly. Now the question is how much of that new profit can go into the plan before December 31.

1. Your tax bill. The extra $120,000 raises what you owe and what your reserve has to cover.
2. Your available cash. The fourth-quarter invoices may not clear until January, so the profit shows up in your books before the cash shows up in business checking.
3. Your contribution limit. As a sole proprietor, more profit raises your limit, up to $72,000. As an S-Corp owner, your limit follows your W-2 salary, so the consultant's Solo 401(k) maximum stays at $62,000.

You can raise your salary before December 31 to lift the employer cap by 25% of the increase, but every added dollar also carries payroll tax. That trade belongs in the compensation review.

The maximum the plan allows and the amount you should contribute are separate figures.

What Is Your Solo 401(k) Contribution Limit for 2026?

For 2026, you can defer up to $24,500 and add the employer percentage on top, up to $72,000 combined. The IRS 2026 limits let you add an $8,000 catch-up at 50 or older, or $11,250 at ages 60 through 63, beyond the $72,000. Any deferral you made at another employer's 401(k) this year counts against the same $24,500.

Did your S-Corp pay you more than $150,000 in FICA wages in 2025? Then any 2026 catch-up has to go in as a Roth contribution, and your plan has to offer Roth contributions for the catch-up to be available.

Find the row closest to your compensation. These figures assume you're under 50, with no wages or retirement contributions from another job and no other plan sharing the limit. The salaries are reference points, not recommendations.

Now back to the consultant's question. Through September, $1,000 from each monthly paycheck went into the Solo 401(k), $9,000 in all, and the business hasn't made an employer contribution yet. That leaves $53,000 of room for 2026, and the bigger year didn't add a dollar of it.

The remaining $15,500 has to come out of the October, November, and December paychecks, which total $37,500 before withholding. That means deferring more than five times the $1,000 a month the consultant has been putting in, so the first thing to check is whether three smaller paychecks still cover personal expenses.

How Much Cash Can Leave the Business?

Your deferral and the employer contribution come from different money. The deferral comes out of your paycheck and lowers your take-home pay. The employer contribution leaves business checking, so it waits until everything else the business owes is covered.

For the consultant, that means $185,000 in checking, minus $64,000 still owed to the tax reserve, $56,000 for payroll, including the consultant's salary, and bills through January, and a $35,000 operating reserve. That leaves $30,000. The last $7,500 of the employer contribution can wait for January's collections, since the S-Corp has until its filing deadline, including extensions, to deposit it.

Once you pick a number, rerun the tax projection. A pre-tax contribution lowers this year's taxable income, but the savings won't always equal the contribution times your tax bracket, because it can change other parts of the return, like the qualified business income deduction. The tax is deferred, not eliminated, and you pay it when you withdraw the money in retirement.

The right contribution is the smaller of what the plan allows and what the business can support.

What Are the Solo 401(k) and SEP-IRA Deadlines?

As an S-Corp owner, your last 2026 payroll run is the final chance to elect 2026 deferrals, and no extension moves it. Every other date runs to a return due date, under the IRS rules for one-participant 401(k) plans and SEP-IRAs.

Starting from zero this late in the year? As an S-Corp owner, opening a Solo 401(k) before your next payroll run still lets you defer from the paychecks left in 2026, up to $24,500 if those wages cover it. Miss that window and employer contributions stay open until the return due date, through either a Solo 401(k) or a SEP-IRA. Plan setup runs through a provider, so start now.

These dates assume a calendar tax year. Your plan and payroll providers can set earlier cutoffs, so check those first.

An extension gives you until the extended date to deposit the employer contribution, as long as you file it by the original due date. Any tax you owe is still due on the original date.

Which Five Numbers Decide Your Contribution?

Your contribution comes down to your eligible compensation, what you've already contributed, the tax you still have to fund, the cash the business has left after its obligations, and the take-home pay you can give up. The first two tell you how much room you have left, and the other three tell you how much of that room you can afford to use.

Fill in the last column before you pick an amount.

Your age and plan terms finish the room calculation. Your quarterly tax planning review supplies the projection, and it needs another pass once you choose the contribution.

For the consultant, $45,500 fits the current numbers, $15,500 from paychecks and $30,000 from business cash, as long as the smaller paychecks cover personal expenses. The last $7,500 waits for January's collections..

What to Do Before Your Next Payroll Run

1. No Solo 401(k) yet? Open one before your next payroll run. As an S-Corp owner, you can only defer from paychecks paid after the plan exists.
2. Send the request below to whoever runs your payroll and whoever handles your return.
3. Fill in the five-number table with what comes back, including the take-home pay you can give up.
4. On S-Corp payroll, change your deferral election before the next paycheck it applies to.
5. Set the employer contribution and its deposit date, and keep any amount that depends on later collections apart from what you can fund now.

Subject: 2026 retirement contribution before year-end

Before year-end, please send my eligible 2026 compensation, my 2026 retirement contributions to date, split into employee deferrals and employer contributions, my remaining 2026 payroll dates if the business runs payroll, and an updated tax projection that includes fourth-quarter income.

Please also propose a deferral per paycheck and an employer contribution, and flag any amount that depends on later collections. The goal is to set both together, before the last payroll run.

You earned the bigger year, and the retirement contribution is how you keep more of it. For an S-Corp owner, waiting for the March return means the deferral half of that decision is already gone.

The contribution doesn't move alone, either. Your salary sets the limit and has to hold up as reasonable compensation, payroll has to carry the deferrals, and the contribution can change your qualified business income deduction. Visor's CPA-led team works through all four together, against one set of books and one tax projection, so a change to one doesn't create a problem in another. A free Visor account shows you what that could look like with live sample data.

Rather not pull these numbers together yourself, or have employees to plan around? Our team will work through it with you and show you what it saves, before your last 2026 payroll run. Talk to our team — Free.

Frequently Asked Questions

Is a Solo 401(k) or SEP-IRA better if my income changes every year?

Both plans let you choose the employer contribution each year, including skipping it. In a lower-profit year, the Solo 401(k) deferral matters more, since it lets you put in up to $24,500 before the employer percentage adds much. Once the employer percentage reaches $72,000 by itself, at $288,000 of S-Corp salary or $360,000 of net self-employment earnings, both plans hold the same amount and the SEP-IRA is less paperwork.

How much can I put into a Solo 401(k) in 2026?

You can defer up to $24,500 for 2026, and your employee and employer contributions together can reach $72,000. At 50 or older you can add an $8,000 catch-up, or $11,250 at ages 60 through 63. The employer portion is capped at 25% of your W-2 salary as an S-Corp owner, or 20% of net self-employment earnings as a sole proprietor. Subtract what you've already contributed, including deferrals at another job.

Can an S-Corp owner contribute to a Solo 401(k)?

Yes, as long as the plan covers only you and your spouse and no other employee qualifies. Your contributions are based on W-2 salary, with the employer portion capped at 25% of it, and distributions don't count. You have to elect deferrals before the wages they come from are paid, so your last 2026 payroll run is the final chance.

Can I still open or fund a retirement account before the end of the year?

Yes. You can open and fund a SEP-IRA up to the business's return due date, including extensions, and adopt a Solo 401(k) by then for employer contributions. S-Corp deferrals need the plan and your election in place before the last payroll run. Opening your first plan as a sole proprietor with no employees? Adopt it and fund 2026 deferrals by your individual return due date, without extensions.

Do Solo 401(k) or SEP-IRA contributions lower self-employment tax?

No. As a sole proprietor, your self-employment tax is figured on net earnings before the retirement deduction, so the contribution lowers income tax only. S-Corp deferrals still carry Social Security and Medicare tax, and the employer contribution isn't wages, so it adds no payroll tax. Pre-tax contributions save federal income tax, and state income tax where your state follows the federal deduction. Roth contributions don't lower current income tax.

Want the contribution set before your last payroll run? Talk to our team — Free