These new plans work like regular 401k plans, except they're limited to one person firms with no employees other than a spouse.  They are ideal for a person who wants to shelter more money than a SEP IRA allows.

Combination of Salary Deferral and Profit Sharing Contributions

Each year, the business owner can make an "employee" contribution to the Solo 401k plan.  This is the same amount employees can put into regular 401k plans.  The limit is 100% of pay up too a maximum of $17,000 for 2012.   And if you are 50 or older you can make an additional catch-up salary deferral contribution of $5,500.

In addition, the plan also allows the business owner  to make a  profit sharing or "employer" tax deductible contributions of up to 25% of compensation, up to the annual maximum of $50,000 for the 2012 plan year.

The total of salary deferrals and profit sharing contributions cannot exceed $50,000 for 2012 and $55,500 if age 50 or older.

These plans must be established by December 31 and the contributions are due by the employers tax filing deadline, plus extensions.

These "individual 401k" plans are offered by many different financial institutions.  Remember these plans are not suitable for businesses with employees.