Moving Company Retirement Plans: Solo 401(k) for Owner-Operators, SIMPLE IRA for Crews

By Yarik Yarosh, CPA ·September 5, 2026 ·Updated September 23, 2026 ·5 min read

Written by Yarik Yarosh, CPA (US & Canada) September 5, 2026 · FL CPA license AC61704 · CPA Ontario

Moving company owners often reinvest profits into trucks and equipment rather than retirement savings. However, retirement plan contributions provide a dollar-for-dollar tax deduction that reduces current-year taxes while building long-term wealth. The SECURE 2.0 tax credit makes the first 3 years of a new plan nearly free for small businesses.

✓Key takeaway

Retirement plan options for moving companies:

Solo 401(k) (owner-operator, no full-time employees other than spouse):

2025 limits: $23,500 employee deferral + 20% of net SE income, or 25% of W-2 salary for an S-Corp owner (up to $70,000 total)
Best for: one-truck operators, husband-wife teams
Can’t be maintained once non-spouse full-time employees are hired

SIMPLE IRA (companies with employees):

2025 limits: $16,500 employee deferral ($17,600 for an employer with 25 or fewer employees) + mandatory employer match (up to 3%) or 2% non-elective
Best for: companies with seasonal or year-round crews
Lower contribution limits but simpler administration

SEP IRA (employer-only contributions):

2025 limit: 25% of each employee’s compensation, up to $70,000
Employer must contribute the same percentage for ALL eligible employees
Best for: companies where the owner wants to contribute a large percentage but doesn’t want employee deferrals

SECURE 2.0 startup credit: Up to $5,000/year for 3 years for new plans. Plus $500/year auto-enrollment credit. Plus employer contribution credit ($1,000/employee for the first 5 years).

How does the plan choice affect the truck purchase decision?

Hypothetical example

Round numbers. A moving company owner operates as an S-Corp with $180,000 in net profit and a $70,000 salary. The owner is considering: (A) buying a $60,000 truck, or (B) making a $50,000 Solo 401(k) contribution.

Option A: Truck purchase (Section 179):

Deduction: $60,000
Tax savings: $60,000 x 32% = $19,200
The owner has a truck (depreciating asset)
The deduction reduces current-year income but provides no retirement savings

Option B: Solo 401(k) contribution:

Deferral: $23,500
Employer contribution: 25% of $70,000 = $17,500
Total: $41,000 (limited by 25% employer + deferral)
Tax savings: $41,000 x 32% = $13,120
The owner has $41,000 in retirement savings (invested, growing tax-deferred)

Option C: Both (if cash flow allows):

Truck (Section 179): $60,000 deduction
Solo 401(k): $41,000 deduction
Total deductions: $101,000
This would create a loss (pass-through of $110,000 minus $101,000 = $9,000 taxable), which may be desirable in a high-income year

The truck provides an operational asset. The retirement plan provides long-term wealth accumulation. Both are deductible. The optimal choice depends on whether the truck is needed for operations and whether the owner has sufficient cash flow for both.

Illustrative numbers only, not a real client and not advice for your facts.

How much can I contribute to each retirement plan type?

The Solo 401(k) generally allows the highest total contribution because it combines an employee deferral (the standard 401(k) limit, plus a catch-up amount for ages 50 and over) with an employer profit-sharing contribution of up to 20% of net self-employment income (the effective rate for a self-employed owner). A SEP IRA allows only the employer contribution (up to 20% of net SE income) with no employee deferral. A SIMPLE IRA has a lower employee deferral ceiling but simpler administration. At $100,000 net profit, a Solo 401(k) typically allows about $42,000 to $43,000 in total contributions (2025 and 2026 deferral limits, before any catch-up), while a SEP IRA caps around $18,600. Contribution limits adjust annually for inflation.

What changes if I hire employees beyond myself and my spouse?

Adding employees changes the plan math significantly. A SEP IRA requires the same contribution percentage for all eligible employees: contributing the effective 20% for yourself means contributing 25% of pay for every eligible employee. A SIMPLE IRA requires either a dollar-for-dollar match up to 3% of compensation or a flat 2% non-elective contribution for everyone. The Solo 401(k) is available only to owner-only businesses (the owner plus spouse); hiring even one common-law employee who meets eligibility thresholds converts it to a standard 401(k) with nondiscrimination testing and higher administration costs ($1,000-$3,000/year). Choose the right structure before your first hire.

When does a moving company have to set up a SIMPLE IRA?

A moving company adding a SIMPLE IRA has to make it effective by October 1 of the year it starts. Miss that date and the plan can’t start until the next year. A company that opens after October 1 can set one up as soon as it’s practical, and one that ran a SIMPLE IRA before can only restart on January 1.

Crew deferrals must be deposited as soon as they can reasonably be separated from company money, and no later than 30 days after the end of the month they were withheld. Your match is due by the return due date with extensions.

A company with 25 or fewer employees who earned $5,000 or more the prior year gets the higher SIMPLE deferral limit automatically: $17,600 for 2025 and $18,100 for 2026.
A SEP is more forgiving on timing. It can be set up and funded as late as the extended due date for the year.
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Cite this page

Yarik Yarosh, CPA. "Moving Company Retirement Plans: Solo 401(k) for Owner-Operators, SIMPLE IRA for Crews." Blue Cloud CPA, September 5, 2026, updated September 23, 2026. https://bluecloudcpa.com/guides/moving-company-retirement-plans

This guide is general information, not tax advice for your specific situation. Which points apply, and how, depends on your facts.