The SEP IRA is an employer-sponsored plan, which means you get the same tax deductions as an employer-sponsored 401(k). Basically, any contributions you make get taken out of your self-employment income before taxes, so you can save significantly on your tax bill. Moreover, you can make contributions as recently as the due date for filing your tax return, including extensions, so it could give you a chance to save more money depending on when you make your contributions.
Aside from the tax benefits, the SEP IRA also offers some flexibility. As a self-employed individual, you can choose how much to contribute in a single year, as long as it’s within the yearly maximum contribution limit, which is 25% of earned income up to $58,000 for 2017. This flexibility can be a lifesaver for self-employed individuals who experience fluctuating
Article Created by A.I.