The soloQRP

A Simpler 401k Plan for Self-Employed Individuals

What is the soloQRP?

The soloQRP (qualified retirement plan) is the ultimate tax vehicle for self-employed individuals. This plan allows small business owners (without common-law employees) to establish a full 401k plan for the owners and their spouses, without the complexities of standard 401ks.

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Why Should I Establish a soloQRP?

Accelerated Contributions

Accelerated Contributions

For tax year 2022, a plan participant can elect to make a maximum employee deferral of $20,500 ($27k if over the age of 50). In addition, the profit-sharing component of 25% of employee earnings can bring the combined total contribution to $61,000 ($67,500 if over the age of 50).

Individual and Business Tax Advantages

Individual and Business Tax Advantages

The profit-sharing component is tax deductible for the employer. Elective deferrals can be excluded from the employees’ income for Federal Income Tax purposes based on a pre-tax election. Since taxes are not paid on investment earnings until they are withdrawn, growth is tax deferred or tax free (with Roth-like contributions).

Personal Loan Provisions

Personal Loan Provisions

A plan participant can take a non-taxable loan from the account up to 50% of the account balance, not to exceed $50,000. The funds generally must be repaid within 5 years at the prescribed interest rate. Some exceptions apply.

Avoid UDFI Tax On Leveraged Real Estate

Avoid UDFI Tax On Leveraged Real Estate

Unrelated Debt-Financed Income Tax (UDFI) is exempt for 401k plans holding real estate. Such exemptions do not apply to real estate held in an IRA.

No IRS Annual Reporting (Below $250,000)

No IRS Annual Reporting (Below $250,000)

Tax reporting is not required until your account balance reaches $250,000. After exceeding $250,000, you will be expected to report IRS Form 5500-EZ annually (due by July 31st). A 1099 may be required if a plan distribution was taken.

Download the soloQRP Eguide

Am I Eligible?


The soloQRP is designed for self-employed business owners and their spouses. To qualify for the soloQRP, the business owner(s) must have self-employed income and no common-law employees.

Common-law employees include anyone that meets all of the following criteria:

  • Non-spouse of business owner(s)
  • Works more than 1,000 hours annually
  • Owns less than 5% of adopting business

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    Establish Your soloQRP in 6 Simple Steps

    What Are the Differences Between Self-Directed IRAs and soloQRPs?

    Self-Directed IRA soloQRP
    Assets Held at Third-Party Custodian Required Optional
    UDFI Tax on Leveraged RE Yes N/A
    Checkbook Control Yes, must establish separate L.L.C. Yes, max $27,000 (No income restrictions)
    Contribution Limits $6,000 under age 50/$7,000 over age 50 Employee Max Contribution: $20,500 under age 50/$27,000 over age 50 Employer Match up to 25%: Combined total $61,000 under age 50/$67,500 over age 50 (including Employee Contributions)
    Alternative Investment options Yes Yes
    Personal Loans Not Permitted Permitted, up to 50% max $50k

    The Ultimate Retirement Plan For The Self-Employed

    Frequent Asked Questions (FAQ)