Working as a DoorDash driver gives you flexibility and independence, but it also means you’re responsible for your own financial future. If you’re earning self-employment income through deliveries, tips, and incentives, you may be eligible for a Solo 401k—a powerful retirement savings plan built for self-employed individuals.
Looking to Open a Solo 401k Plan?
Get started today with just a few clicks – The Carry Solo 401k Plan is a featured-packed self-directed account that lets you invest in both traditional and alternative assets, take out a loan, or do a Mega Backdoor Roth conversion with a few clicks.
GET STARTEDSolo 401(k) eligibility and contribution limits depend on IRS rules. Carry does not provide tax advice, consult a tax advisor. Carry Advisors LLC, an SEC-registered investment adviser, provides investment advisory services for discretionary and non-discretionary accounts (e.g., Solo 401(k), IRA, taxable brokerage accounts). Bank and trust accounts are not advised by Carry Advisors. Brokerage accounts are introduced by Global Carry LLC and carried by DriveWealth LLC, both members FINRA/SIPC. Advisory fees may apply and additional disclosures are described in our Form ADV and CRS.
This plan can offer high contribution limits, tax advantages, and full control over how your retirement funds are invested. Here’s what gig workers like you should know.
📌 Also Read: How to Set Up A Solo 401k Plan
Who Qualifies for a Solo 401k?
Solo 401ks, also known as one-participant 401k plans, are made for self-employed individuals with no full-time employees other than a spouse. If you’re an independent contractor driving for DoorDash, that likely includes you.
✅ You Must Earn Self-Employment Income
As a Dasher, your earnings from deliveries, promotions, and tips are considered self-employment income. Most drivers report this on Schedule C of their tax return. If you’re using an S corporation, you’ll need to pay yourself a salary and report W-2 wages to qualify.
✅ You Must Not Have Full-Time Employees
If you operate solo (or with a spouse helping out), you’re eligible. But hiring full-time staff — someone working over 1,000 hours per year — could make you ineligible for a Solo 401k. In that case, you’d need to consider a different type of 401k plan.
✅ Any Common Business Structure Works
Whether you’re a sole proprietor, LLC, or S corp, you can typically open a Solo 401k. What matters most is that you’re running your own business and don’t employ full-time workers.
📝 Note: Hiring a full-time assistant or driver in the future may require switching to a full 401k plan that includes employees.
📌 Also Read: Important Forms for Solo 401k Owners
What You’ll Need to Get Started
To open a Solo 401k, you’ll need a few things in place:
✅ Documented Business Income
Your contribution limits depend on your income, whether that’s net earnings (for sole proprietors) or W-2 wages (for S corps). Keep detailed records of your business expenses and earnings throughout the year.
✅ Business Setup
You don’t need to incorporate to qualify, but you must have a legitimate business operation and file the appropriate tax forms.
✅ Spouse Participation (Optional)
If your spouse helps you manage deliveries, finances, or admin tasks and earns self-employment income from the same business, they can also make contributions under the same plan.
Why Solo 401ks May Work for DoorDash Drivers
As your delivery income grows, you might be looking for ways to save beyond an IRA or savings account. A Solo 401k can scale with your income and help reduce your tax burden—while building long-term retirement savings.
Contribution Limits for 2025
The IRS allows you to contribute both as an employee and as the employer:
✅ Employee contribution: Up to $23,500
✅ Catch-up (age 50+): Add $7,500
✅ Special catch-up (ages 60–63): Add $11,250
✅ Employer contribution: Up to 25 percent of your compensation
✅ Combined total: Up to $70,000, or $81,250 with all catch-ups
📝 Note: Your exact limit depends on your business structure and how much income you report.
📌 Also Read: IRS | 401(k) limit increases to $23,500 for 2025, IRA limit remains $7,000
Traditional or Roth: Choose Your Tax Advantage
Solo 401ks typically allow you to make either:
- Traditional contributions (pre-tax): Lowers taxable income now
- Roth contributions (after-tax): Offers tax-free withdrawals in retirement
You may also be able to split contributions between both types, depending on the provider.
Investment Flexibility
Most Solo 401k plans allow you to invest in mutual funds, ETFs, index funds, and individual stocks. Some providers also support access to alternative investments like real estate or private funds, but be sure to follow IRS rules to avoid prohibited transactions.
What to Expect as a Plan Owner
Like any retirement account, there are benefits and responsibilities. Here’s a quick breakdown:
Benefits
- Much higher contribution limits than IRAs or SEP IRAs
- Traditional and Roth tax strategies available
- Full control over investment choices
- Spouses can contribute if actively involved in the business
Responsibilities
- File IRS Form 5500-EZ once plan assets exceed $250,000
- Keep detailed records of income and contributions
- Convert to a full 401k if you hire full-time staff
📝 Tip: Working with a tax or financial advisor can help you stay compliant and get the most out of your plan.
📌 Also Read: Solo 401k Vs SEP IRA
Final Thoughts: Is a Solo 401k Right for DoorDash Drivers?
A Solo 401k may be worth considering if you’re a self-employed DoorDash driver earning consistent income. It offers higher contribution limits than most retirement plans, tax advantages tailored to your situation, and freedom to invest how you want.
If you’re serious about growing your savings and minimizing taxes, this could be a strong step forward, especially as your gig income grows. Just make sure your business qualifies, track your income closely, and consult a professional before setting things up.
📌 Want to learn more about managing money as a gig worker? Read:
Disclaimer:
The Carry Learning Center is operated by The Vibes Company Inc. (“Vibes”) and contains generalized educational content about personal finance topics. While Vibes provides educational content and technology services, all investment advisory services discussed on this website are provided exclusively through its wholly-owned subsidiary, Carry Advisors LLC (“Carry Advisors”), an SEC registered investment adviser. The information contained on the Carry Learning Center should not be construed as personalized investment advice and should not be considered as a solicitation to buy or sell any security or engage in a particular investment, accounting, tax or legal strategy. Vibes is not providing tax, legal, accounting, or investment advice. You should consult with qualified tax, legal, accounting, and investment professionals regarding your specific situation.
The accounts, strategies and/or investments discussed in this material may not be suitable for all investors. All investments involve the risk of loss, and past performance does not guarantee future results. Investment growth or profit is never a guarantee. All statements and opinions included on the Carry Learning Center are intended to be current as of the date of publication but are subject to change without notice.
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