No. of Recommendations: 1
The SEP is funded with dollars from the Corp. (Employer) the Single K, (Solo) is funded with Employer + Employee dollars. The limits for 2005 are as follows and assume an unincoporated business (Schedule C filer)

SEP: LEsser of 20% of reported Gross income or $42k whichever is lower
Single K, 20% of reported gross income plus $14,000 or $42k whichever is less. The Single K will also allow you to contribute an additional $4k as a catch up contribution if you turned 50 in 2005 or are already over 50, for a possible total of $46k.
These limits are per person.
Single Ks will allow you take loans, you can not take loans from a SEP,
You can roll a SEP or a Single K to an IRA.
Beginning in 2006, the Single K will give you the option to contribute the salary portion (15k in 2006) as a ROTH contribution. You may also contribute the catch up portion as a ROTH as well if you are over 50.
Another site that goes over the single k is


The profit sharing part, aka the employer part of a self employed 401K for an unincoropated business in not 20% of gross income. For an unincorporated business the calculation is:

(Gross income - expenses = Business net profits - self employment tax deduction) x .2 = maximum profit sharing contribution

See the worksheet for a non-incorporated business on Fidelity's website near the bottom of the page:

Also, not all self emplyed brokers allow loans. Some brokers also require a set up fee and a maintenance fee. Some don't. Be sure to read the fine print of the documents. Some fees are actually hidden.

Print the post  


The Retirement Investing Board
This is the board for all discussions related to Investing for and during retirement. To keep the board relevant and Foolish to everyone, please avoid making any posts pertaining to political partisanship. Fool on and Retire on!
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.