How much can my business put into retirement for me in 2026?
The answer depends on your retirement plan type, but for 2026 the maximum a self-employed business owner can contribute is around $72,000 if under 50, $80,000 if 50 or older, and up to $83,250 for owners between ages 60 and 63. These figures represent the combined maximum for a solo 401(k) plan.
A solo 401(k) has two contribution sides. The employee deferral allows up to $24,500 in 2026 for owners under 50. On top of that, the employer contribution allows up to 25% of your compensation. Together these can reach $72,000 for someone under 50 with enough business income to support it.
If you are 50 or older, you can add a catch-up contribution of $7,500, bringing the total to $80,000. A newer rule for owners between ages 60 and 63 allows a higher catch-up of $11,250, pushing the maximum to $83,250. For medical business owners earning strong clinical income alongside practice revenue, these limits represent meaningful tax strategy opportunities.
A SEP IRA works differently. All contributions come from the employer side only, meaning your business contributes up to 25% of net self-employment earnings with the same $72,000 cap. Because there is no employee deferral piece, you need significantly higher income to reach that ceiling. Below roughly $175,000 of self-employment income, the solo 401(k) typically allows larger contributions than a SEP IRA would.
One timing detail matters. A solo 401(k) must be established by December 31 of the tax year, even if you fund it later. A SEP IRA can be opened and funded up to the extended filing deadline. If you are thinking about setting up a solo 401(k) for 2026, you need to have the plan in place before the year ends.
These figures are current as of 2026 and should be verified, as retirement plan rules change periodically. The right plan depends on your income, age, whether you have employees, and your overall situation. A CPA for medical businesses can help you determine which structure fits and make sure the plan gets established on time.
If you want help figuring out how much your business can contribute to retirement and which plan makes the most sense, reach out to schedule a consultation.
Your Trusted CPA
Next Step:
A Short Conversation
Tell us about your business and what you need help with. We'll ask a few questions, explain how we can help, and tell you exactly what it will cost.
More Questions
What do the most financially healthy home care agencies do differently?
They classify workers correctly and run real payroll. They know margin per client and reprice or decline unprofitable ones. They price in travel and training, keep books current monthly, and set aside taxes as profit arrives.
Read answerAm I supposed to collect sales tax at my spa?
Probably yes, at least on retail products. Services like injectables are typically exempt, but skincare, supplements, and take-home products are usually taxable. The rules vary by state, and uncollected tax becomes your personal liability.
Read answerEveryone in home care argues about 1099 versus W-2 caregivers. What is the truth right now?
Hourly caregivers whose schedules and work an agency controls generally look like employees under the classification tests that matter. The cost of misclassification is severe, including back wages, penalties, and potential personal liability for agency owners.
Read answerWhat financial red flags should make a med spa owner stop and fix things now?
Six warning signs that are cheap to fix now and expensive to fix later: prepaid package cash spent with services untracked, inventory not counted against sales, uncollected retail sales tax, intercompany fees on paper only, no tax reserve set aside, and books falling behind during growth.
Read answerWhat financial setup does a home care startup need before its first client?
Before taking your first client, a home care agency needs an entity with a deliberate tax election, separated business banking, payroll configured with defensible worker classification from hire one, and bookkeeping running from month one. Starting clean costs a fraction of cleaning up later.
Read answerHow should my books handle Medicare and insurance money that arrives months late?
Your books need to track what has been earned, what has been paid, and what remains outstanding by payer. Without this structure, you end up navigating the business by bank balance between deposits.
Read answer
