Each year the IRS determines the maximum amount that may be contributed to a solo 401k plan including the Roth designated portion of the solo 401k (aka Roth solo 401k).
By making contributions to the Roth designated solo 401k, these contributions can later be distributed tax free and penalty free as long as the Roth solo 401k qualified distribution rules are met (generally once you reach age 59 1/2 and at least 5 years after the first contribution to your Roth designated solo 401k account). Of course, contributions that you make as Roth designated solo 401k contributions are made with after-tax dollars so you can’t deduct them from your business tax return or on your personal tax return. There is no such thing as free lunch when making Roth solo 401k contributions.
Roth Solo 401(k) contribution limits for 2024
The Roth Solo 401(k) contribution limit for 2024 is $23,000 for employee contributions. The catch-up contribution for those age 50 and older in 2024 is $7,500 which raises the employee Roth solo 401k contribution limit to $30,500 for those eligible.
