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FOR FREELANCERS

I Ran 31 Freelancers' Numbers Through A Solo 401k Contribution Calculator. Most Were Overpaying By $9,400.

(Saving for Retirement and Saving on Taxes Are the Same Move)

I spent three weeks this July running a solo 401k calculator against 31 freelance clients' books: designers, copywriters, developers, the usual crowd who left W-2 life without anyone explaining what happens next. The average freelancer was overpaying by $9,400 a year. Not reckless. Just never shown the difference between an IRA and the lever that actually matters.

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Real accountants Flat monthly pricing Your contribution ceiling built from your real books

Phoenix · August 31, 2026 · 6 min read

Woman working on tablet outdoors

31 freelancers. One calculator.

31

freelancers' books run through the calculator in July

“I have used TurboTax for six years and it never once told me I could do this. My accountant just filed the return. Amadae showed me the number and then showed me how to actually hit it.”

Amadae client · UX designer, $118K in freelance revenue

01

Your April tax bill is a symptom, not the disease

Every freelancer treats the number on the bill like the problem. The real disease is thinking like an employee while getting taxed like a business: no withholding, no HR department setting aside a match, no safety net. One UX designer billing $118,000 said she felt like she was doing everything right and still got blindsided. She was not doing anything wrong. She never had a system built for income outside a paycheck.

Do this today: Pull your last three invoices and calculate what a 30% set-aside would have looked like. If you did not set it aside, start today.

A $118,000 year with an employee's habits, illustrative

Freelance revenue$118,000
Withheld by an employer$0
401k match from anyone$0
Set aside at 30% as invoices landed$0
Should have been set aside by April$35,400

02

The 15.3% tax that hides until it is too late to plan around

Self-employment tax is Social Security and Medicare, both halves, stacked on top of income tax. At a W-2 job your employer quietly pays half. As a freelancer you pay all 15.3% yourself, on top of whatever bracket you land in. Summer is when freelance income spikes, which makes the Q3 estimate due September 15 the biggest surprise of the year.

Do this today: Before your next quarterly payment, run year-to-date net income through a proper estimate instead of guessing off last year.

Coffee at green desk
15.3% self-employment tax, both halves, on top of income tax. No employer is paying the other half anymore.

03

An IRA cannot compete with a solo 401k. Not even close.

Of the 31 freelancers, 24 were contributing to a traditional or Roth IRA and calling it a retirement strategy. An IRA caps out around $7,000 a year. A solo 401k, depending on net self-employment income, can shelter closer to $69,000. Every dollar into the employer bucket lowers taxable income dollar for dollar, a lever an IRA cannot pull hard enough to matter at real freelancer income.

Do this today: Calculate net self-employment income (revenue minus expenses minus half your SE tax) and see how far it is from $7,000. That gap is what you are leaving on the table.

Annual contribution ceiling

IRA$7,000
Solo 401kup to $69,000

24 of 31 freelancers reviewed were using only the IRA

Want all of this handled for you, for one flat monthly price?

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04AMADAE

A calculator built into your books, not bolted on after

Most solo 401k calculators online ask for one net income number and spit out a limit, as if your books are clean, your expenses are categorized, and your entity status does not change the math. For most freelancers in July none of that is true. Amadae runs it differently. Because your books, quarterly estimates, and entity structure live in one system, your contribution limit updates as your income changes. You see the real number every time you log in, not a guess you made in January.

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Where the number comes from

Online calculatorGeneralist CPAAmadae
Uses your real, categorized booksAt year end
Limit updates as income changes
Knows your entity status (sole prop vs S-corp)You guess
Quarterly estimate adjusted for the contributionExtra fee
Election deadline tracked for you
Flat monthly priceFree

05

Employer vs employee contributions: the order you fund them matters

A solo 401k has two buckets and most freelancers only know about one. The employee deferral is up to $23,000 in 2025, plus a catch-up at 50 or older. The employer contribution is roughly 20% of net self-employment income for a sole proprietor, or 25% of compensation through an S-corp. The employee deferral has a hard election deadline tied to when you elect it, not when you fund it, and missing it can lose you that bucket for the year.

Do this today: Confirm your plan documents allow both contribution types and check the election deadline against your calendar today, not in December.

Two buckets, one deadline

  • Employee deferral: up to $23,000 in 2025
  • Catch-up contribution if 50 or older
  • Employer: about 20% of net SE income as a sole prop
  • Employer: 25% of compensation through an S-corp
  • Election deadline checked against your calendar

06

September 15 is a retirement deadline dressed up as a tax deadline

Everyone knows September 15 as the Q3 estimate due date. Fewer freelancers realize it is also the last real window to adjust your entity setup or solo 401k strategy before the year's numbers are essentially locked. Income is up, summer spending is up, and the get-organized-before-fall instinct should apply to your contributions, not just the school supply list.

Do this today: Block 30 minutes this week to review your entity setup before the September deadline locks your options.

Modern office
September 15: the Q3 estimate is due, and it is the last clean window to change your entity or your solo 401k strategy this year.

BONUSAMADAE

Bonus: The $9,400 overpayment that became an $11,400 save

Remember the designer from card one. When we ran her actual books through Amadae's calculator, her ceiling was not the $7,000 she had been treating as the limit. It was $34,200, based on net self-employment income after expenses. She elected the employer contribution before the deadline, adjusted her Q3 estimate, and dropped her total tax bill by $11,400 compared to the year before, on less income.

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“I have used TurboTax for six years and it never once told me I could do this. My accountant just filed the return. Amadae showed me the number and then showed me how to actually hit it.”

A

Amadae client

UX designer, $118K in freelance revenue

Cut her tax bill by $11,400

31 freelancers. One calculator.

31

freelancers' books run through the calculator in July

$9,400

average annual overpayment

24 of 31

were relying on a $7,000 IRA cap

$34,200

one designer's real ceiling, not $7,000

From Amadae freelancer reviews, July. Contribution limits are 2025 figures.

Accounting built for people who left the W-2

Books, payroll, and taxes from real accountants, for one flat monthly price starting at $249.

  • Solo 401k ceiling calculated from your real books and updated as income moves
  • Quarterly estimates recalculated around your contributions
  • S-corp setup and payroll when the math says so
  • Year-end federal and state returns filed for you
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No long-term contract. Cancel any time. The intro call is free.

Plans from

$249/mo

If you make $40K - $69K. Flat, no hourly bills.

  • Monthly profit and loss reports
  • Tax set-aside management
  • Expense categorization
  • Real-time financial dashboard
  • Business bank account connections
  • Invoicing and contractor payments
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Cancel any timeReal accountantsTaxes filed for you

Straight answers

Questions creators ask us

I already have an IRA. Is a solo 401k really that different?+

An IRA caps around $7,000. A solo 401k can shelter up to about $69,000 depending on net self-employment income, and the employer portion lowers taxable income dollar for dollar. That gap is the whole game.

Can I still open one this year?+

Usually, but the employee deferral has an election deadline that is easy to miss. The intro call checks your dates and your ceiling on your actual numbers.

Do I need an S-corp for this to work?+

No. Sole proprietors can contribute about 20% of net SE income as the employer. An S-corp changes the math to 25% of compensation, and we run both versions on your books.

What does it cost?+

Plans start at $249 a month, flat. Books, estimates, payroll, and the year-end return, with no hourly bills.

Run the real math before September 15

The freelancers who came out ahead were not the ones earning the most. They ran the actual numbers instead of guessing. Thirty minutes will show you your real ceiling.

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