A solo 401(k) contribution generally doesn't reduce your qualifying income, because it was never subtracted from your business income in the first place. For a sole proprietor, solo 401(k) contributions are deducted on Schedule 1 of your personal return, and they don't run through Schedule C as a business expense. Lenders qualify self-employment income from the business's own cash flow: Fannie Mae's Cash Flow Analysis (Form 1084) starts with your Schedule C net profit and adds back specific non-cash items such as depreciation, depletion, amortization or casualty loss, and business use of home. That detail changes the framing of your question. Since the retirement contribution never hit Schedule C, there's nothing to add back, and voluntary retirement contributions aren't on the standard add-back list either. The accurate version: the contribution simply doesn't lower the business income you're judged on. Required obligations of running the business (taxes, office rent, and the like) do reduce qualifying income. A voluntary contribution you could pause at any time sits on your personal return instead. A practical note: where entries land on your returns (Schedule C versus Schedule 1) drives what counts, and treatment can vary by loan program. If self-employment income is the crux of your qualification, have your returns reviewed early so there are no surprises about what counts and what doesn't.