A Solo 401k owner can have both a Roth solo 401k and a Traditional solo 401k simultaneously and make contributions to both, as long as the contributions do not exceed the contribution limits. More specifically, the solo 401k rules allow for both pre tax and Roth contributions in addition to voluntary after-tax contributions, resulting in just one plan but separate sub-accounts are required for pretax, Roth, and/or voluntary after-tax (mega backdoor Roth) contributions.
You can choose to make Roth Solo 401k, pre tax Solo 401k, or voluntary after-tax solo 401k contributions. You may also divide your contributions between all three sources in the same year.
Employee contributions (salary deferrals) can be designated as either Roth or Traditional. Employer contributions may also be designated as pre tax or as Roth.
The total employee contributions across all 401k plans cannot exceed the annual limit ($23,000 in 2024 for those under 50), or $30,500 for those 50 or older.
Employer contributions to the profit-sharing portion of the Solo 401k are separate and do not count towards the employee deferral limit.
In summary, as long as you stay within the overall contribution limits, you can absolutely contribute to all three solo 401k contribution types–Roth Solo 401k, Traditional Solo 401k, and voluntary after-tax solo 401k in the same year. The option to make all three contributions types provides valuable tax diversification in retirement.
