Workers with side gigs can sock away even more for retirement in accounts designed for freelancers and other self-employed individuals. Getty Images By Kimberly Lankford, Contributing Editor July 18, 2018 QI have a regular full-time job, but I also earn a few thousand dollars in freelance income every summer by writing travel articles. Can I make tax-deductible contributions to a solo 401(k) or a SEP? AIf you have any self-employment income—from running your own business or freelancing on the side—you can make tax-deductible contributions either to a solo 401(k) or a Simplified Employee Pension (SEP). If you earn just a few thousand dollars in self-employment income, you’ll be able to contribute more to the solo 401(k), if you haven’t already contributed the maximum to a 401(k) through your full-time job. SEE ALSO: 35 Ways to Earn Extra Cash 2018 With a solo 401(k), which is also called an individual 401(k), self-employed people can contribute up to $55,000 in 2018 (or $61,000 if they’re 50 or older and making catch-up contributions). You’re allowed to sock away so much because you can make contributions as both an employee and an employer. For example, as an employee, you can contribute up to $18,500 a year (or $24,500 if you’re 50 or older). As an employer, you can salt away as much as 20% of your net self-employment income (your business income minus half your self-employment tax). Your total contributions can’t be more than the total amount of your freelance income for the year. That means if your net self-employment income was $10,000, you could make a tax-deductible contribution of up to $10,000 to your solo 401(k). Advertisement However, if you already contribute to a 401(k) through an employer, your solo 401(k) limits will be reduced by any contributions you’ve made to your workplace plan. But that only affects the first $18,500 (or $24,500) of contributions. If you’ve already contributed the maximum to your other 401(k), then you can still contribute up to 20% of your net self-employment income to the solo 401(k) – although your combined contributions to both plans can’t exceed $55,000, or $61,000 if you made catch-up contributions. SEE ALSO: Self-Employed? Avoid These Audit Red Flags on Your Tax Return SEP contributions are limited to 20% of your net self-employment income, up to $55,000, with no catch-up contributions. So if you earn $10,000 in self-employment income for the year, your SEP contributions are limited to $2,000. Contributions to a 401(k) through your full-time job don’t affect your SEP contribution limits. With both types of self-employed retirement savings plans, your contributions are tax-deductible and grow tax-deferred until you withdraw the money in retirement. A few solo 401(k) providers also offer Roth solo 401(k)s, for which you forgo the tax break up front but can withdraw the money tax-free in retirement. Most firms that offer IRAs also offer SEPs, usually with similar investing choices and fees. Not as many financial institutions offer solo 401(k)s, and you need to be careful of fees. But Fidelity, Charles Schwab and several other brokers offer low-cost solo 401(k)s. SEE ALSO: Comparing Self-Employed Retirement Plans: Solo 401(k) vs. SEP IRA vs. SIMPLE IRA Got a question? Ask Kim at email@example.com.