Retirement & Tax Strategy for Business Owners: 2026 Foundations

Last updated: July 2026. This is a foundational, evergreen post we revisit as contribution limits and tax law change check back for updates, or subscribe to our newsletter.

Business owners have access to retirement and tax planning tools that most employees don't but the details matter, and they shift almost every year.

Solo 401(k) Contribution Limits

For 2026, a self-employed individual can contribute up to $24,500 as an employee, plus an additional $8,000 catch-up contribution if you're 50 or older. Layered with employer profit-sharing contributions, the combined ceiling reaches $72,000 for the year well above what a typical workplace 401(k) allows.

The QBI Deduction Interaction Most Owners Miss

Many pass-through business owners qualify for a 20% Qualified Business Income deduction under Section 199A. What's often overlooked: employer-side retirement contributions (like a SEP IRA or the employer portion of a Solo 401(k)) generally reduce the income eligible for that deduction, while employee deferrals typically don't. That distinction can meaningfully change which retirement plan structure makes sense a decision worth making in coordination with your CPA.

Estate & Succession Planning Backdrop

As of 2026, the lifetime gift and estate tax exemption stands at $15 million per individual ($30 million for married couples), permanently raised under the One Big Beautiful Bill Act a meaningful planning window for owners approaching a significant liquidity event.

For a deeper look at what that law changed and why it matters, see Estate & Legacy Planning: 2026 Foundations →

This material is for informational purposes only and does not constitute tax, legal, or investment advice. See our full Disclaimer.

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