Any employer can establish a SEP IRA as long as three requirements are met. The easiest way to meet the first requirement of a written SEP agreement is for the employer to complete IRS Form 5305-SEP. Then, each eligible employee—even if it is only yourself—must receive information on the SEP IRA plan, including a copy of IRS Form 5305-SEP. Finally, each eligible employee must open a SEP IRA at a financial institution. The account belongs to the employee, and the employer makes contributions directly to the financial institution that then credits the correct contribution amount to each employee's SEP IRA. Participating in a SEP IRA has income tax filing consequences for both employers and employees. Both employers and employees should seek tax advice and planning assistance when trying to determine the impact to current and future tax planning scenarios.