Colorado (CO) Self-Employed Retirement Contribution Calculator
Tax year: 2026 · Figures for Tax Year 2026 · Source: IRS
Built and audited by the CalcSumly Engineering Team using official IRS and State Department of Revenue data.
Your Schedule C net profit before the retirement contribution deduction.
Age as of December 31. Determines your Solo 401(k) catch-up contribution tier (ages 50+, 60-63).
Solo 401(k)
Recommended$46,804
maximum contribution · 2026
SEP-IRA
$22,304
maximum contribution · 2026
At $120,000 of self-employment income in Colorado, a Solo 401(k) allows $46,804 maximum contribution versus $22,304 for a SEP-IRA — a difference of $24,500 in contribution capacity.
How self-employed retirement contributions work in Colorado for 2026
Solo 401(k) and SEP-IRA contributions are above-the-line deductions on Form 1040 Schedule 1. They reduce federal AGI but do not affect self-employment tax (SE tax is calculated on Schedule C net profit before contributions).
Colorado taxes federal taxable income at a flat rate. Retirement contributions reduce federal taxable income (through their effect on federal AGI), and Colorado inherits that reduction automatically.
Solo 401(k) vs SEP-IRA comparison
The Solo 401(k) allows a larger contribution at most income levels because it adds an employee elective deferral ($24,500) before the employer profit-sharing portion. The SEP-IRA has only the employer portion (20% of net SE compensation, capped at $72,000). At very high incomes where the Solo 401(k) base also hits $72,000, the plans become equal unless you qualify for a catch-up contribution (Solo 401(k) only).
Catch-up contributions (Solo 401(k) only)
Filers age 50-59 or 64+ add $8,000 in catch-up above the §415(c) cap. Filers age 60-63 add $11,250 (SECURE 2.0 enhanced catch-up). SEP-IRA has no catch-up at any age.
Scope and limitations
This calculator models standard deduction filers. It does not include QBI deduction, health insurance deduction, other plan types, or interactions with employer 401(k) plans from W-2 employment. Consult a tax professional and plan custodian before contributing.
Sources
- IRS Notice 2025-67 — 2026 Retirement Plan Limits (§415, §402(g), §401(a)(17))
- IRS Publication 560 — Retirement Plans for Small Business (SEP, SIMPLE, Qualified Plans)
- IRS Rev. Proc. 2025-32 — 2026 Standard Deduction Amounts
- CO Dept. of Revenue — Individual Income Tax (4.4% flat rate, 2026)
- CO Dept. of Revenue — DR 0104 Individual Income Tax Return
Frequently asked questions
Do retirement contributions reduce self-employment tax?+
No. Solo 401(k) and SEP-IRA contributions are above-the-line deductions on Form 1040 Schedule 1, not Schedule C deductions. SE tax is calculated on Schedule C net profit before contributions. Contributions reduce federal AGI, which lowers federal income tax and most state income taxes, but SE tax is unchanged.
What is the maximum Solo 401(k) contribution for self-employed in 2026?+
The 2026 Solo 401(k) base maximum is $72,000 (§415(c)) plus catch-up: $8,000 for ages 50-59 or 64+ and $11,250 for ages 60-63 (SECURE 2.0). The employee elective deferral is $24,500. The employer portion is 20% of net SE compensation (IRS Pub 560 formula). The elective deferral plus employer contribution cannot exceed $72,000.
What is the maximum SEP-IRA contribution for 2026?+
The 2026 SEP-IRA maximum is 20% of net SE compensation (net profit minus the deductible half of SE tax), capped at $72,000. Net SE compensation is also capped at the §401(a)(17) compensation limit of $360,000. SEP-IRA has no employee deferral and no catch-up option.
Do Colorado state taxes recognize Solo 401(k) and SEP-IRA deductions?+
Yes. Colorado taxes federal taxable income at a flat 4.4% rate for 2026. Because retirement contributions reduce federal taxable income (through their effect on federal AGI and the federal standard deduction), Colorado automatically inherits the deduction. Every dollar of retirement contribution reduces Colorado income tax by 4.4 cents.
How much state tax does a retirement contribution save in Colorado?+
At Colorado's flat 4.4% rate, the state tax savings are straightforward: 4.4% of the contribution amount. For a $46,000 Solo 401(k) contribution, Colorado savings would be approximately $2,024. This is in addition to the federal income tax savings at your federal marginal rate.
Related calculators
Self Employment Tax Calculator
Work out your Social Security and Medicare tax from net profit, with the deductible half and a full breakdown.
Freelance Effective Tax Rate Calculator
See your all-in effective tax rate broken down by SE tax, federal income tax, and state income tax, with your marginal rate versus blended effective rate explained.
Freelance Take-Home Pay Calculator
See what you actually keep after self employment tax, income tax, and business expenses.