Can a solo 401(k) for moonlighting physicians add room?

Can I defer another $24,500 in a solo 401(k)?

No. For 2026 the IRS caps employee deferrals at $24,500 per person, counted across every 401(k) and 403(b) you contribute to. An attending who already maxes a hospital or group plan therefore has no second employee allowance. The solo plan's employer share works differently: it is about 20 percent of net self-employment earnings, and it falls under the separate $72,000 defined-contribution limit for each unrelated employer.

Assante Wealth Management treats the accounts as one deferral ledger. If your group plan already received $24,500, the solo plan can still receive its employer contribution, provided the 1099 activity is genuinely separate. A solo 401(k) only fits a business with no eligible employees besides you and a spouse.

Early attending years: when 1099 work creates no new room

A W-2 shift belongs to that employer's plan, not a solo 401(k), and a 1099 from a company you co-own with your main practice may fall under controlled-group rules. A partner whose group pay is already self-employment income gets no extra room for that same income. Check ownership links before opening anything; a new account cannot create space the law combines away.

In your 50s, the catch-up is one allowance too

The IRS catch-up limit for 2026 is $8,000 at age 50 and older, but it remains one allowance across your 401(k) and 403(b) plans. A $40,000 1099 can add employer room even after the group plan is full, but it cannot give you a second $24,500 deferral or a second catch-up.

In January, Miriam receives a 1099-NEC for $40,000 of weekend teleradiology reads, separate from her W-2 from the group's professional corporation. Hypothetical: Miriam is 58, divorced, a radiologist and partner in a private group; she has $2.4 million mostly in the group's 401(k) and cash balance plan and is now reading on a 1099.

Her group 401(k) already took $24,500 plus the $8,000 Roth catch-up, so the solo 401(k) gets no employee deferral. The group catch-up must be Roth because her prior-year FICA wages exceeded $150,000. The solo plan doesn't provide another catch-up.

Step 1: her W-2 already exceeds the $184,500 Social Security wage base. Only the 2.9 percent Medicare part of self-employment tax applies to the reads: $40,000 × 0.9235 × 2.9 percent = about $1,070. The 0.9 percent additional Medicare tax does not count toward the deductible half of self-employment tax.

Step 2: subtract half of that tax, about $535, from $40,000. The adjusted amount is about $39,465. Step 3: multiply by 20 percent: $39,465 × 20 percent = about $7,890 for the employer contribution.

Before the solo plan, Miriam puts $32,500 each year into 401(k)s: $24,500 plus $8,000. After the employer contribution, the total is $32,500 + $7,890, or about $40,390. That extra $7,890 buys tax-deferred space, not a result. The funds inside the solo plan can fall in price, and the balance she later withdraws could be smaller than what she put in.

A second $24,500 deferral into a new solo plan surfaces in March when Miriam's CPA places the W-2 box 12 entry beside the solo statement and finds a $24,500 excess. If she leaves it in past April 15 of the following year, the excess and its earnings can be taxed for the deferral year and again when distributed. At 37 percent, the federal tax is about $9,065 each time.

For your own estimate, take Schedule C net profit, subtract half of the self-employment tax from Schedule SE, and multiply the remainder by 20 percent. Someone below the wage base uses the full 15.3 percent rate on 92.35 percent of profit, so the employer amount comes out a little lower. State tax treatment varies.

Ages 60 to 63 change the catch-up, not the ledger

The IRS catch-up limit rises to $11,250 from turning 60 through 63, but it still goes into one plan, not two. Once the group W-2 stops, a solo 401(k) can take the full $24,500 deferral plus that catch-up, on top of the employer share, so moonlighting reads may become the main savings engine.

Leave cash room for a bad year. Nothing forces an employer contribution, and the employer share can generally go in by the business tax-return deadline, including extensions, so waiting for the 1099 can protect liquidity. A lost contract may mean no contribution; a disability may end the income. A deposit over the limit left past April 15 is much harder to repair.

The law can move. Keep the custodian's plan-document restatements, especially those concerning Roth catch-ups, and sign or return them as required.

Should I open a solo 401(k), a SEP-IRA or skip both?

A solo 401(k) usually earns its paperwork when 1099 profit is about $20,000 each year for three or more years, producing roughly $3,700 to $3,900 of employer room or more. A SEP-IRA is easier to set up but can interfere with a backdoor Roth IRA; a taxable account gives up the deduction in exchange for access and simpler administration.

The same three choices differ in ways that matter to a physician with a full group plan. The solo 401(k) adds the employer share, preserves later employee-deferral room if the group W-2 ends, and avoids the IRA pro-rata issue, but it brings plan administration. A SEP-IRA gives roughly the same employer calculation with less setup, but its IRA balance can complicate a backdoor Roth IRA. A taxable account has no contribution deduction, yet the money remains accessible without plan paperwork.

Which records settle the question before the account is opened?

The table answers that question using the records a moonlighting physician can collect today. Start with the deferrals-to-date row; it prevents the error that creates the largest repair problem.

Where Assante Wealth Management fits in a moonlighting year

Assante Wealth Management can run the 20 percent calculation from your 1099 and Schedule SE, check deferrals already listed on your W-2, and keep the solo plan to one account with one fund line on your one-page plan. Send the request form with last year's 1099 and December pay stub so the first discussion starts with the records that set the limit.