The federal government just announced a new retirement savings program — TrumpIRA — launching in January 2027, aimed specifically at gig workers, freelancers, and self-employed people without employer plans. The headline number: a 25-year-old contributing $165 a month could retire with $465,000.
That's a useful program. But freelancers who are paying attention have had something far more powerful sitting available right now: retirement accounts that let you deduct up to $70,000 a year from your taxable income. Most solopreneurs never use them.
Here's what's actually available today, how much you can deduct, and why your expense records are the one variable controlling all of it.
Why Retirement Accounts Are Your Biggest Tax Deduction
Most freelancers think about tax deductions as expenses: software subscriptions, a home office, a client lunch. These are real deductions — but they're capped by what you actually spend.
Retirement contributions are different. You're not spending money — you're moving it from your business account to a retirement account in your own name. The money isn't gone; it's yours. But the IRS treats the contribution as a deduction that reduces your taxable income today, and the investment grows tax-deferred until retirement.
A freelancer who earns $100,000 in net self-employment income and contributes $25,000 to a SEP-IRA pays tax on $75,000, not $100,000. At a 28% effective rate, that's $7,000 saved — this year, on money that's still yours, growing in an investment account.
SEP-IRA: The Simplest Option for Most Freelancers
A SEP-IRA (Simplified Employee Pension) is the default recommendation for most self-employed people — and for good reason. It takes about 15 minutes to open at any major brokerage (Fidelity, Vanguard, Schwab, Charles Schwab all offer them for free), requires no annual filings, and has the highest contribution limits of any account you can open on your own.
2026 contribution limit: Up to 25% of net self-employment income, maximum $70,000.
Deadline: You can fund your SEP-IRA for the 2026 tax year all the way until your tax filing deadline — including extensions — in 2027. This means you can decide how much to contribute after you know exactly what you earned, and reduce your tax bill retroactively.
Who it's best for: Solo freelancers and solopreneurs with no employees. If you hire employees, you're required to contribute proportionally for them too, which changes the math significantly.
Solo 401(k): Higher Effective Limits, More Flexibility
A Solo 401(k) — also called an Individual 401(k) or i401k — is more complex to set up but gives higher effective contribution limits for freelancers who earn less than ~$200,000.
Here's why: a Solo 401(k) lets you contribute in two capacities:
- As an employee: Up to $23,500 in 2026 (plus $7,500 catch-up if you're 50+), dollar-for-dollar from your income.
- As an employer: Up to 25% of net self-employment income.
Combined, the maximum is still $70,000 — but the employee contribution isn't percentage-based, so someone earning $60,000 can contribute far more than a SEP-IRA would allow. A freelancer earning $60,000 net could contribute $23,500 (employee) + ~$11,200 (25% employer) = $34,700 to a Solo 401(k), versus only $13,750 to a SEP-IRA.
Deadline: The plan must be established by December 31 of the tax year, but you can fund it until your filing deadline. Open it before year-end if you want this option for 2026.
How Much Can You Actually Deduct
The honest answer: it depends entirely on your net self-employment income — which is revenue minus all deductible business expenses.
This is where most freelancers leave money on the table twice. First they miss business expense deductions (software subscriptions they forgot, a home office they didn't claim, client meals they lost receipts for). Then they calculate their SEP-IRA or Solo 401(k) contribution limit on an inflated net income number and over-contribute — or calculate it on an underreported net income and miss additional contribution room they were entitled to.
The right number to calculate from is your exact net self-employment income after every legitimate deduction. Which means you need a complete, accurate record of every business expense.
Traditional IRA: The Backup Option
If a SEP-IRA or Solo 401(k) feels like too much to set up right now, a Traditional IRA is available to anyone with earned income and is deductible depending on your income and whether you have a workplace retirement plan elsewhere.
2026 limit: $7,000 ($8,000 if 50+). Fully deductible for single filers with no workplace plan, regardless of income.
It's far less powerful than a SEP-IRA for high-earning freelancers, but it's better than nothing — and you can open and fund one in the same tax year.
The Expense Tracking Connection
Your maximum retirement contribution is a direct function of your net self-employment income. Your net income is your revenue minus your documented business expenses. Incomplete expense records mean an inaccurate net income, which means you're calculating your deduction on the wrong base number — and either missing contribution room or over-contributing.
It's the same problem that causes freelancers to overpay quarterly taxes. The fix is the same: capture every expense the moment it happens, so that when you sit down to calculate your year-end numbers, you're working from a complete picture.
ReceiptIQ makes your expense records automatic. Snap a receipt and it's extracted and stored in seconds. Forward an invoice email and it's logged immediately. At year end, search "all business expenses 2026" and get a complete, itemized list — every receipt attached — that gives you and your accountant the accurate net income number everything else is calculated from.
The retirement deduction is one of the few remaining tax strategies available to freelancers that genuinely changes the number by thousands of dollars. It starts with knowing your actual net income.