SEP-IRA

• A SEP-IRA is a simplified employee pension. Any employer can establish a SEP, but many self-employed individuals use SEPs to put away money for their retirement. You can establish a SEP with a bank or other financial institution and make contributions directly to the SEP-individual retirement arrangement (IRA) account. You can contribute up to 25 percent of your annual income to a SEP-IRA. Contributions aren't taxed in the year you make them. Instead, you pay tax on the money at the time you withdraw it from the SEP-IRA.