Making $120k on Uber Black or Turo: How Much Retirement Contribution Is Actually Deductible

Gross is not the number

A driver who grosses $120,000 on Uber Black, or a host who brings in $120,000 from a small Turo fleet, has a good year by any standard. But the retirement contribution that year is not computed on $120,000. It is computed on what is left after expenses, and for a vehicle-heavy business that is a very different figure. Getting this right is the difference between a legitimate $30,000-plus deduction and an excess contribution that costs 6 percent a year until it is fixed.

This article works both cases at the same gross so you can see how the deductible contribution moves. The Solo 401(k) for high earners page has the general rules; here the focus is on the two expense profiles.

The Uber Black driver: mileage is the deduction

Assume $120,000 gross, 45,000 business miles spread evenly across 2026, and $6,000 of other deductible costs (phone, tolls, commercial insurance above the personal policy, car washes, water and snacks).

Mileage. The 2026 standard rate is $0.725 per mile from January through June and $0.76 from July through December. Half the miles at each rate: 22,500 x $0.725 = $16,313 and 22,500 x $0.76 = $17,100. Total mileage deduction about $33,413. A driver who leases or finances a luxury sedan may do better with actual expenses, but the standard rate is the simpler illustration.

Net profit. $120,000 minus $33,413 minus $6,000 = about $80,600.

Self-employment tax. $80,600 x 0.9235 = $74,434 subject to tax. At 15.3 percent, about $11,388. Half is $5,694.

Employer contribution base. $80,600 minus $5,694 = about $74,900.

Solo 401(k) limits. Employee deferral: $24,500. Employer contribution: roughly 20 percent of $74,900, about $14,980. Total: about $39,500, well under the $72,000 ceiling. At 50 or older the deferral catch-up pushes the total higher, still under $80,000.

SEP alternative. Employer piece only, about $14,980.

Roth IRA. $7,500, and at this modified adjusted gross income a single filer is still eligible for the full amount.

So the driver who grossed $120,000 can deduct about $39,500 through a Solo 401(k), or about $15,000 through a SEP, and can add a Roth IRA on top in either case. The Solo 401(k) more than doubles the shelter.

The Turo host: depreciation is the deduction

Assume the same $120,000 gross from four vehicles, $28,000 of depreciation, $18,000 of insurance, maintenance, cleaning and platform fees, and $9,000 of loan interest. Turo income is generally reported on Schedule C when the host provides substantial services, which most active hosts do, so it is subject to self-employment tax like the driver's income.

Net profit. $120,000 minus $28,000 minus $18,000 minus $9,000 = $65,000.

Self-employment tax. $65,000 x 0.9235 = $60,028. At 15.3 percent, about $9,184. Half is $4,592.

Employer contribution base. $65,000 minus $4,592 = about $60,400.

Solo 401(k) limits. Employee deferral: $24,500. Employer contribution: about 20 percent of $60,400, roughly $12,080. Total: about $36,600.

SEP alternative. About $12,080.

The Turo host has lower net profit than the driver, so a smaller employer contribution, but the employee deferral is the same $24,500 because it depends only on having at least that much earned income. This is the key insight for vehicle-heavy businesses: the Solo 401(k)'s employee deferral is insulated from your expense ratio as long as net profit stays above $24,500. A SEP is not.

Where hosts and drivers go wrong

• •Contributing on gross. A host who puts $24,000 into a SEP because "20 percent of $120,000 is $24,000" has over-contributed by roughly $12,000. The excess is subject to a 6 percent excise tax each year it remains.
• •Forgetting the SE-tax adjustment. It is small but it is not optional. The employer contribution is computed after subtracting half of self-employment tax.
• •Using last year's limits. For 2026, use $72,000, $80,000 at 50 and older, and $24,500 for the deferral.
• •Missing the December 31 election. The employee deferral to a Solo 401(k) must be elected in writing by December 31. Drivers who first hear about a Solo 401(k) from their preparer in March have lost the deferral for the prior year and can only make the employer contribution, which is the same as what a SEP would have allowed.
• •Bonus depreciation surprises. A host who takes large first-year depreciation on a new vehicle can drive net profit down sharply, which shrinks the employer contribution. If the plan is to max retirement, run the depreciation election and the contribution math together.

Deductible versus Roth

Both examples above treat the Solo 401(k) as pre-tax, which is where the "deductible" in the title comes from. The employee deferral can instead be made Roth, in which case it is not deductible now but grows tax-free. At $80,600 or $65,000 of net profit, a single filer is in the 22 percent federal bracket, so a $24,500 pre-tax deferral saves about $5,390 in federal tax this year. A Roth deferral of the same amount saves nothing now and shelters all growth later. The employer contribution is always pre-tax.

A useful rule for a gig worker with variable income: defer pre-tax in high-income years, Roth in low-income years. The plan documents allow you to change the election each year.

The Saver's Match does not apply here, but might to your household

At these income levels the driver and host are above the federal Saver's Match phase-outs that begin January 1, 2027 ($20,500 to $35,500 single, $30,750 to $53,250 head of household, $41,000 to $71,000 joint). But a spouse with part-time gig income filing separately, or a household with a lower combined MAGI, may qualify. The Treasury pays the match into a non-Roth IRA even when the qualifying contribution was Roth; the Saver's Match Roth rule page explains the mechanics.

Running your own numbers

The free Gigaverse tools take gross income, mileage split by the two 2026 rates, and other expenses, and return the Solo 401(k), SEP and Roth IRA limits with the SE-tax adjustment already applied. Growth illustrations in the app use 6%, the rate the Treasury uses for its own projections; that is an illustration, not a guarantee, and actual returns will differ.

Where Gigaverse fits

Gigaverse is a subscription retirement app for people with 1099 income, including drivers and hosts. Today it offers a Roth IRA through a FINRA/SIPC-member broker-dealer. Applications for a Solo 401(k) and a SEP IRA are open at gigaverse.ai/solo-401k and gigaverse.ai/sep-ira: you apply, a person confirms your eligibility and sends your plan documents, then you fund before the deadline. It also computes your limits from a running estimate of fares, miles and expenses, tracks contributions across accounts, and hands the numbers to your CPA at filing time. Gigaverse is pursuing SEC RIA registration and does not guarantee returns. The full breakdown is on the Solo 401(k) for high earners page.