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LearnFAQSelf-Employed & Small Business

When is the deadline to set up and fund a Solo 401(k)?

Answer

The SECURE Act changed this. You can now open a Solo 401(k) as late as your business's tax-filing deadline, including extensions, and still make employer contributions for the prior year. However, employee salary-deferral elections generally must be documented by December 31 of the tax year for a sole proprietor, even if the cash goes in later. That timing quirk trips people up: if you wait until spring to open the plan, you may only be able to make the employer portion for the prior year, not the employee deferral. To capture both pieces, set up the plan and elect your deferral before year-end. Verify current deadlines at irs.gov, since these rules have shifted recently.

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