Individual 401(k) Plans
What is an Individual 401(k)?
An Individual 401(k)—also known as an i401(k)—is a retirement plan that can maximize your savings if you're self-employed or if you're a partner in a business whose only employees are the partners and their spouses.
Who can use the plan?
Self-employed individuals and business owners with no common-law employees and their spouses who are employed by the business.
The business owner can contribute both as an employer and employee.
C corporations, S corporations, and limited liability companies (LLCs), with no common-law employees, can also participate.
Employer contribution limits
Employers can contribute up to 25% of compensation* not to exceed $61,000 for the 2022 tax year and $66,000 for the 2023 tax year.
Contributions are generally deductible as a business expense and aren't required every year. When contributions are made, however, all participants must receive the same percentage.
Employee contribution limits
Employees can defer 100% of their compensation* up to $20,500 for the 2022 tax year ($27,000 for employees age 50 or older) and $22,500 for 2023 ($30,000 for employees age 50 or older).
Employees can make pre-tax or Roth (after-tax) contributions.
Rollovers of pre-tax assets are permitted.