SEP stands for simplified employee pension. IRA stands for individual retirement account. A SEP IRA is an easy-to-open, easy-to-use IRA that is designed to give employers a way to contribute to their employees retirement savings. A SEP IRA can also be used by people who are self-employed as a means of saving for their own retirement. The IRS has an entire section of its Web site devoted to SEP IRAs called the SEP Resource Library. You can read about how to set up a SEP, who qualifies to open a SEP, contribution limits, income tax deductibility of contributions, and much more. There are also a host of forms and publications in the resource library to help you with income tax filing and tax planning.
|Jennifer Mathes, Ph.D.|