Corporations, partnerships and nonprofit organizations with employees other than the owner and spouse can also establish a  Small Business 401(k) plan , which is an affordable, easy-to-manage 401(k) designed for the needs of small businesses. Contribution rules for Small Business 401(k)s are very similar to those for Individual 401(k)s. Employers may make deductible matching contributions and/or profit-sharing contributions for each eligible employee of up to 25% of the employee's compensation, provided the employee's total deferrals and employer contributions for the year do not exceed $57,000 for 2020 (or $63,500 if the employee has reached age 50 or older during 2020 and the plan permits catch-up contributions). Also for 2020, the maximum compensation upon which to base contributions is $285,000.

Disclosure: Be sure to consult your accountant or tax professional for advice on contributions.