Retirement Plans for Freelance Developers: Solo 401(k), Roth Options, and the Mega Backdoor

By Yarik Yarosh, CPA ·September 5, 2026 ·3 min read

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

Freelance web developers and software engineers with no employees (other than a spouse) have access to the Solo 401(k), which offers the highest contribution limits and the most flexibility of any small business retirement plan. The combination of employee deferrals, employer contributions, and (in some plans) after-tax contributions with in-plan Roth conversions makes the Solo 401(k) the most powerful retirement vehicle available to solo operators.

✓Key takeaway

2025 Solo 401(k) contribution limits:

Employee deferral: $23,500 (traditional or Roth)
Employer contribution: 25% of net SE income (after the SE tax deduction)
Combined maximum: $70,000
SECURE 2.0 super catch-up (ages 60-63): additional $11,250, bringing the employee deferral to $34,750

The Roth option: Most Solo 401(k) providers (Fidelity, Schwab, Vanguard) offer a Roth sub-account. The $23,500 employee deferral can be directed to the Roth side (no current-year deduction, but tax-free growth and tax-free withdrawals in retirement). The employer contribution must go to the traditional (pre-tax) side.

Key advantage for high-income developers: The Solo 401(k) has no income phase-out for contributions. A developer earning $300,000 can still make the full contribution. Traditional IRA deductions phase out above $87,000 (single, 2025) and Roth IRA contributions phase out above $165,000. The Solo 401(k) has no such limits.

How much can a freelance developer actually contribute?

Hypothetical example

Round numbers. A freelance developer has $180,000 in net SE income (Schedule C profit after expenses).

SE-adjusted income: $180,000 x 92.35% = $166,230 Employer contribution (25%): $166,230 x 25% = $41,558 Employee deferral: $23,500

Total contribution: $41,558 + $23,500 = $65,058

The developer could direct the $23,500 employee deferral to the Roth sub-account (no deduction, but tax-free growth) and take the $41,558 employer contribution as a pre-tax deduction.

Tax savings from the pre-tax portion: At a 32% marginal rate, the $41,558 employer contribution saves $13,299 in federal income tax. The contribution also reduces QBI, but since this developer is not an SSTB, the QBI deduction adjusts accordingly.

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

What about the mega backdoor Roth?

Some Solo 401(k) plan documents allow voluntary after-tax contributions (beyond the $23,500 employee deferral and the employer contribution) up to the $70,000 combined limit, with in-plan Roth conversions. This is the “mega backdoor Roth” strategy.

A developer contributing $23,500 (employee deferral) + $41,558 (employer contribution) = $65,058 could add up to $4,942 in voluntary after-tax contributions to reach the $70,000 cap. Those after-tax dollars are immediately converted to the Roth sub-account (in-plan Roth conversion), and all future growth is tax-free.

Not all Solo 401(k) providers support this feature. The plan document must explicitly allow voluntary after-tax contributions and in-plan Roth conversions. Providers that support this include some self-directed Solo 401(k) custodians and certain brokerage plans. Fidelity and Schwab’s standard Solo 401(k) plans do not currently support after-tax contributions.

Related guides:

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Cite this page

Yarik Yarosh, CPA. "Retirement Plans for Freelance Developers: Solo 401(k), Roth Options, and the Mega Backdoor." Blue Cloud CPA, September 5, 2026. https://bluecloudcpa.com/guides/web-development-retirement-plans

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