Can Uber Drivers Open a Solo 401k?

Driving for Uber gives you flexibility and control over your schedule. But since you’re considered self-employed, you’re also responsible for your own retirement planning. If you’re earning 1099 income and don’t have access to a traditional employer plan, a Solo 401k could be a smart way to save for the future. 

This type of retirement plan is built for individuals who work for themselves and don’t have full-time employees. For Uber drivers, it offers high contribution limits, potential tax benefits, and flexible investment options. Here’s how it works and what to consider before opening one.

📌 Also Read: How to Set Up A Solo 401k Plan

Who Can Open a Solo 401k?

A Solo 401k, also known as a one-participant 401k, is meant for self-employed individuals without full-time employees, aside from a spouse. If Uber is your main source of income and you don’t run a larger team, you likely qualify.

✅ You Must Have Self-Employment Income

Income you earn from Uber is considered self-employment income. If you’re a sole proprietor, this is usually reported on Schedule C. If you’ve formed an S corporation, you’ll need to pay yourself a salary and report W-2 wages.

✅ You Cannot Have Full-Time Employees

You are not allowed to have full-time employees who work more than 1,000 hours per year. Your spouse is the only exception and can also contribute to the plan if they’re involved in the business.

✅ Your Business Structure Can Vary

You don’t need to form an LLC or corporation. Sole proprietors can also qualify. What matters is that you operate a legitimate business and file your taxes accordingly.

📝 Note: If you decide to hire a full-time employee in the future, you may need to switch to a different type of 401k that includes employees.

📌 Also Read: Important Forms for Solo 401k Owners

What You’ll Need to Get Started

Before setting up a Solo 401k, make sure you have a few key things in order:

✅ Accurate Income Records

Your contribution limit is based on your net business income (or salary, if incorporated). Keep detailed records of your Uber earnings and related expenses.

✅ Spouse Participation (If Applicable)

If your spouse helps with driving, logistics, or managing your Uber business, they may also be eligible to contribute under the same Solo 401k.

✅ Proper Business Setup

You don’t need to register a business entity, but you do need to report your self-employment income and meet IRS requirements.

Why a Solo 401k May Be a Good Fit for Uber Drivers

Working for yourself means you also decide how and where to save. A Solo 401k gives you more room to contribute than most other retirement plans and lets you choose how your money is invested.

2025 Contribution Limits

As both the business owner and employee, you can contribute in two ways:

✅ Employee contributions: Up to $23,500
✅ Age 50 or older: Additional $7,500 catch-up
✅ Ages 60 to 63: May qualify for an extra $11,250
✅ Employer contributions: Up to 25 percent of your compensation
✅ Total possible contribution: Up to $70,000, or $81,250 with all catch-ups

📝 Note: The actual amount you can contribute depends on your income and how your business is structured.

Traditional and Roth Contribution Options

You can choose how your contributions are taxed:

Some Solo 401k providers allow you to split contributions between both types.

Investment Flexibility

Solo 401ks often give you more control than traditional employer plans. Depending on the provider, you may be able to invest in:

📝 Important: Make sure to follow IRS rules to avoid prohibited transactions.

Things to Keep in Mind

Managing a Solo 401k gives you control, but it also comes with responsibilities.

Benefits:

Responsibilities:

📝 Tip: A qualified tax or financial professional can help you stay compliant and make the most of your plan.

📌 Also Read: Solo 401k Vs SEP IRA

Final Thoughts: Is a Solo 401k Worth Considering?

If you’re earning self-employment income through Uber and don’t have employees, a Solo 401k could be a strong retirement option. It gives you the chance to save more, reduce taxes, and invest in a way that matches your goals.

Just make sure your income is properly reported, your business is set up correctly, and you’re comfortable handling the plan yourself. If you’re unsure, talking to a tax advisor may help you decide if it’s the right move.

📌 Want more tips for independent workers? Check out:

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