2026 Solo 401(k) Contribution Limits for Physicians: Tax Planning Math for 1099 and S-Corp Income
Maybe you went fully 1099 this year, or you picked up locum shifts on top of a hospital job. You opened a solo 401(k) because a colleague said it was the best account for self-employed physicians. Then you looked up the limit, saw $72,000, and assumed that was your number.
It probably isn't. Your real limit turns on your income and your entity type, and a hospital plan can quietly eat into it. Below are the 2026 solo 401(k) contribution limits and the math for your income type, plus the trap that catches physicians with a W-2 job on the side.
Haven't opened the plan yet? Start with our guide on how to set up a solo 401(k) as a 1099 physician, then come back here for the math.
In This Blog
What are the 2026 solo 401(k) contribution limits?
For 2026, a solo 401(k) lets you contribute up to $24,500 as the employee, plus an employer contribution, with the two combined capped at $72,000. Catch-up contributions for physicians 50 and older sit on top of that cap.
Here are the IRS figures from Notice 2025-67, with 2025 for comparison:
Limit | 2025 | 2026 |
Employee elective deferral | $23,500 | $24,500 |
Total contributions (employee plus employer) | $70,000 | $72,000 |
Catch-up, age 50 and older | $7,500 | $8,000 |
Catch-up, ages 60 to 63 | $11,250 | $11,250 |
Maximum compensation a plan can count | $350,000 | $360,000 |
Counting catch-ups, the 2026 ceiling rises to $80,000 at 50 and older, or up to $83,250 if you turn 60, 61, 62, or 63 during the year, according to the IRS contribution limits page.
One condition applies to the total limit. Total contributions can't exceed the lesser of the dollar cap or 100% of your compensation. That second part is where most of the planning happens.
How do employee and employer contributions work?
A solo 401(k) treats you as two people: the employee and the employer. Each side has its own rules.
The employee deferral
A fixed dollar cap: $24,500 for 2026.
The IRS allows deferrals up to 100% of your compensation, up to that cap.
It can go in as traditional (pretax) or Roth (after-tax), if your plan offers both.
The employer contribution
Up to 25% of compensation as your plan defines it.
For sole proprietors, "compensation" means something narrower than your profit, which we'll get to next.
If your plan allows it, SECURE 2.0 now lets employer contributions be designated Roth. The IRS says those are reported on Form 1099-R for the year they're allocated to your account.
The key question is what counts as compensation. A 1099 physician and an S-corp physician answer it differently.
How much can a 1099 physician contribute?
If you're a sole proprietor or a single-member LLC taxed as one, the IRS defines your plan compensation as net earnings from self-employment after subtracting two things: half of your self-employment tax, and contributions for yourself. IRS Publication 560's Deduction Worksheet for Self-Employed walks through the calculation step by step, and the examples below start from net Schedule C profit.
Because the contribution reduces its own base, the employer side ends up smaller than 25% of your profit. The math: take your net Schedule C profit minus half of SE tax, divide by 1.25, then take 25% of that. It works out to 20% of Schedule C profit minus half of SE tax.
Example: Dr. Maya Chen, locum anesthesiologist
Dr. Chen is 44, works locums on 1099s, and has no employees. Her 2026 net Schedule C profit is $250,000.
Net Schedule C profit: $250,000
SE tax base (x 92.35%): $230,875
Social Security tax: 12.4% on the first $184,500 (2026 wage base, SSA): $22,878
Medicare tax: 2.9% on $230,875: $6,695
Total SE tax: about $29,573. Half of it: about $14,787
Schedule C profit minus half of SE tax: about $235,213
Employer contribution ($235,213 divided by 1.25, times 25%): about $47,043
Employee deferral: $24,500
Total: about $71,543, just under the $72,000 cap
A physician with roughly $250,000 of net 1099 profit and no other workplace plan lands near the 2026 maximum. Below that, the employer side limits you. At $120,000 of profit, the employer piece shrinks to the low $20,000s, while the $24,500 employee deferral stays the same.
This hypothetical is for illustration, and your own numbers will differ.
How much can an S-corp physician contribute?
If your practice is taxed as an S corporation, the math runs off your W-2 salary from the S-corp. The IRS requires S corporations to pay reasonable compensation to a shareholder-employee before taking nonwage distributions.
Your employer contribution is up to 25% of compensation as your plan defines it, and for S-corp owners that means W-2 salary. The IRS is direct on this: S corporation distributions don't count as earned income for retirement plan purposes.
Example: Dr. Lena Ortiz, S-corp dermatologist
Dr. Ortiz is 41 and pays herself a $150,000 W-2 salary from her S-corp.
Employee deferral: $24,500
Employer contribution (25% x $150,000): $37,500
Total: $62,000
To reach the $72,000 cap, Dr. Ortiz would need a $190,000 salary ($47,500 divided by 25%).
Salary is the lever here: while you're below the $72,000 cap, every dollar of W-2 salary you cut takes 25 cents of possible employer contribution with it. Setting salary is a facts-and-circumstances judgment, and we cover the benchmarks in reasonable salary by specialty for S-corp physicians.
The IRS bases your salary deferrals on your Form W-2 compensation from the S-corp. Confirm how and when deferrals are withheld with your plan and payroll provider well before year end.
Schedule C vs. S-corp, side by side
1099 / Schedule C | S corporation | |
Compensation the plan uses | Schedule C profit minus half of SE tax and the contribution | W-2 salary only (distributions don't count) |
Employer contribution | 20% of Schedule C profit minus half of SE tax | Up to 25% of plan compensation |
Lever you control | Profit | Salary, within reasonable compensation |
I have a W-2 hospital job and 1099 side income. What's my limit?
This is the most common source of confusion. Two separate limits apply, and they work differently.
The employee deferral limit is per person
The $24,500 limit is yours, not your plan's. The IRS is explicit that deferrals to 401(k), 403(b), SIMPLE, and SARSEP plans are added together. If you defer $24,500 at the hospital, you have $0 of employee deferral left for your solo 401(k).
A 457(b) is the exception. It has its own separate limit.
The total limit depends on your hospital's plan type
The $72,000 total cap applies to plans maintained by one employer and any related employer. If your hospital offers a 401(k) and you don't own any of it, your solo 401(k) generally gets its own separate $72,000 total.
A 403(b) is different. Under an IRS rule, a 403(b) is combined with the retirement plan of a business you control, using a more-than-50% ownership test. If you own more than 50% of your practice (a sole proprietor owns all of it), a hospital 403(b) and your solo 401(k) can end up sharing a single $72,000 total cap.
If you own part of the hospital or group, controlled-group rules can combine plans too. Have your tax team review that before you contribute.
Example: Dr. Raj Patel, hospitalist who moonlights
Dr. Patel is 47. His hospital W-2 is above the Social Security wage base, and he defers the full $24,500 into the hospital plan. He also earns $80,000 of net 1099 moonlighting income.
SE tax base (x 92.35%): $73,880
SE tax: Medicare only, because his W-2 wages already covered the Social Security wage base (IRS), so 2.9% of $73,880, about $2,143. Half: about $1,071
1099 profit minus half of SE tax: about $78,929
Employer contribution ($78,929 divided by 1.25, times 25%): about $15,786
Employee deferral in the solo 401(k): $0 (used at the hospital)
His income may also trigger Additional Medicare tax. The IRS counts wages and self-employment income together for this test, including a spouse's on a joint return. The tax applies above $200,000 for single, head of household, or qualifying surviving spouse filers ($250,000 married filing jointly, $125,000 married filing separately). We've left it out to keep the example focused on the plan math; your tax team would account for it.
What happens next depends on the hospital plan type:
If it's a 401(k), his solo 401(k) has its own total cap, so the $15,786 fits easily.
If it's a 403(b), his hospital deferral, any hospital contributions, and the $15,786 all count toward one $72,000 total. With a $24,500 deferral and, say, a $10,000 hospital contribution, he's at $50,286. That still fits, but a generous hospital plan could squeeze him.
Notice the resulting effect. His W-2 wages lowered his SE tax, which raised the base his contribution is figured on. If you've already deferred in both plans this year, jump to the overcontribution section below.
What about catch-ups and the new Roth catch-up rule?
Age 50 and older
If you're 50 or older by the end of 2026, you may add up to $8,000 on top of the regular limits, if your plan allows catch-ups.
Ages 60 to 63
SECURE 2.0 created a larger catch-up for physicians who turn 60, 61, 62, or 63 during the year. For 2026 that amount is $11,250 instead of $8,000.
The Roth catch-up requirement
SECURE 2.0 requires some high earners to make catch-ups as Roth. The test looks at your FICA wages from the employer sponsoring the plan in the prior year. Notice 2025-67 sets the threshold for 2026 catch-ups at $150,000 of 2025 wages.
How that plays out for physicians:
1099 physicians. The final regulations say someone with no FICA wages from the plan sponsor in the prior year isn't subject to the requirement. If your only income from the practice is self-employment income, you generally aren't subject, because that income isn't FICA wages from the plan sponsor.
S-corp physicians. Your S-corp salary is FICA wages from your plan's sponsor. If your 2025 FICA wages from the S-corp (Social Security wages, Form W-2 box 3) exceeded $150,000, your 2026 catch-ups generally must go in as Roth.
The final regulations generally apply starting with 2027. For 2026, plans follow a reasonable, good-faith reading of the rule, so ask your plan provider how they're handling it.
Can my spouse contribute to my solo 401(k)?
Yes, if your spouse works in the business. The IRS lets a solo 401(k) cover a business owner with no employees, or that owner and a spouse.
A participating spouse has their own employee deferral limit, so the household's deferral room can double. Your spouse's deferrals are limited to their own compensation from the practice, so they need to be paid for work they actually do.
How are traditional and Roth solo 401(k) contributions taxed?
This section covers how each is taxed, not which one to pick. That choice depends on your brackets now and later, and it's a conversation for your tax team.
Traditional contributions go in with before-tax dollars. You lower this year's taxable income and pay tax when you withdraw.
Roth contributions go in with after-tax dollars. The IRS Roth comparison chart says withdrawals of contributions and earnings aren't taxed if it's a qualified distribution.
Choosing Roth doesn't raise your limit. Traditional and Roth deferrals share the same $24,500 employee cap.
For S-corp physicians over the wage threshold, the choice is partly made for you: catch-ups generally must go in as Roth, as covered above.
What are the solo 401(k) contribution deadlines?
Missing a deadline can cost you a year of contributions. Based on IRS Publication 560 (2025):
Step | Deadline |
Elect your employee deferral (owner, existing plan) | By the end of the tax year |
Fund the employee deferral (sole proprietor) | By your return filing deadline, including extensions |
Fund the employee deferral (S-corp owner) | Confirm timing with your plan and payroll provider |
Employer contribution | By the due date of the employer's return (for a sole proprietor, your Form 1040), including extensions |
Adopt a new plan (sole proprietor, no employees) | By the tax filing deadline, without extensions, for 2023 and later years |
The plan adoption row is a SECURE 2.0 change. For a new plan's first year only, it's an exception to the December 31 election. Pub 560 confirms that for 2023 and later years, a sole proprietor with no employees can adopt a 401(k) after the end of the tax year, as long as it's adopted by the unextended filing deadline.
IRS plan document guidance spells out what that means in practice: a calendar-year sole proprietor has until April 15 to adopt a 401(k) and make contributions retroactive to the preceding year. Your plan document still controls the details, and the 2026 revision of Pub 560 may update this wording.
One more annual requirement: once your solo 401(k) holds $250,000 or more at year end, the IRS generally requires a Form 5500-EZ.
What if I contribute too much?
It happens most often to physicians with a hospital plan and a solo plan. Excess deferrals must be distributed by April 15 of the following year. Miss that date and the IRS taxes the excess twice: in the year you contributed it and again when it comes out.
We walk through the fix in what happens if you overcontribute to a retirement account.
Where does the solo 401(k) fit in a physician's retirement plan?
The solo 401(k) is often the core plan in a self-employed physician's tax planning, and other plans can sit alongside it.
Some plans allow after-tax contributions beyond the deferral limit, which sets up the mega backdoor Roth. The IRS lists after-tax employee contributions as part of annual additions, so they count toward the same $72,000 total limit for 2026.
Higher earners often add a cash balance plan on top.
If you're still using a SEP-IRA, read the SEP-IRA trap for self-employed physicians before year end.
One eligibility note. A solo 401(k) is for an owner with no employees other than a spouse. Under SECURE 2.0, a part-time employee with 500 or more hours in two consecutive years may have to be allowed into the 401(k) under proposed IRS guidance. Talk to your tax team before you hire.
Get your 2026 number before December 31
The limits are the easy part. Your actual number depends on your entity and every other plan you touch. And if you're a 1099 physician with a calendar-year plan already in place, the deferral election has to happen by December 31.
At Doc Wealth, your tax team can run your 2026 contribution math across every plan you're in before the deadlines hit. You'll get prompt, dependable communication and a clear picture of what you can contribute. Contact your tax team today.
Figures are for the 2026 tax year, with 2025 shown for comparison. Retirement plan limits are indexed and change each year. Based on current law as of September 2026.
Disclaimer: This material is intended for educational and informational purposes only and does not constitute tax, legal, accounting, or financial advice. The content is general in nature and may not apply to your specific circumstances. Tax laws and financial regulations are subject to change and interpretation, and the application of these laws can vary based on individual situations. Before making any decisions, you should consult with a qualified tax advisor, legal counsel, or financial professional.
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