A SEP IRA stands for simplified employee pension and is a type of traditional IRA for self-employed individuals or small business owners. A SEP IRA can be set-up by any type of business owner who has more than one employee or for anyone who is earning their income through freelance work. The money that is contributed into a SEP IRA is tax-deductible for the employer or individual and is held in an regular IRA account in the employee’s name.
One big advantage of a SEP IRA is that the tax deductible contribution limit is higher than a traditional or Roth IRA, which is up to 25%, and can help to reduce the taxable income that is being contributed into a SEP IRA. Other advantages of a SEP IRA include there are no required contributions or tax filings and the potential for tax-deferred growth until the money is withdrawn. Contributions into a SEP IRA can be made at any time during the year, up until the employer’s tax returns are due. A SEP IRA can be secured through United Retirement Advisors Group who may specialize with these type of investments.