Simplified Employee Pension Plans (SEP IRAs) help self-employed individuals, small business owners, and employees of small businesses get access to a tax-deferred benefit when saving for retirement. Employer contributions to SEP IRAs can vary from 0% to 25% of compensation (a maximum of $66,000 for 2023 and $69,000 for 2024 for each account owner). These contributions must come from the net earnings of the business and are only tax-deductible on the business's tax filing.
If you're an employee of a small business, contributions must be funded by your employer. If you're an employer contributing on behalf of your employees, you must contribute the same percentage for each eligible employee.
While SEU IRA contributions and growth are tax-deferred, withdrawals are subject to taxation at the account owner's applicable income tax rate. Check with your tax advisor for your specific contribution limit.