Solo(k) contributions consist of two parts: Employee and Employer, and this allows most solo business owners to contribute significantly more than a SEP IRA. Both are capped at 51,000 dollars per year in 2013. You can make that contribution with 163,000 dollars in business income in a Solo(k) and need 245,000 dollars of business income with a SEP IRA. Also, the Solo(k) has a Roth component that has no income limitations. That allows you to contribute to a Roth using after-tax funds and any earnings may be withdrawn tax-free at retirement. You may also take a loan from a Solo(k), but cannot from a SEP. Lastly, financed real estate investments in a Solo(k) can qualify for an exception to the tax on unrelated-debt financed income (UDFI), but the same cannot be said for SEPs. A SEP may trigger taxes if you take a loan.