Business Owner
intermediate · $50K - $100K
A Simplified Employee Pension IRA lets self-employed individuals contribute up to 25% of net self-employment income, max $72,000 (2026).
Easier to set up than Solo 401(k), but no employee contributions or loans.
Annual Limit
25% of net SE income, max $72,000 (2026)
Tax Benefit
Deduct up to $72,000 in retirement contributions
Requirements
- Self-employment income or own a business
- Must cover eligible employees (if any)
- Contributions are employer-only
How to Implement
- 1Open a SEP IRA at a brokerage that offers one
- 2Calculate 25% of net self-employment income
- 3Contribute by tax deadline (including extensions)
- 4Deduct contributions on tax return
Frequently Asked Questions
Featured Providers
- Fidelity
- Vanguard
- Schwab
Educational Only: This information is for educational purposes. Consult a qualified financial advisor or tax professional before implementing.
Last reviewed: April 2026
Related business owner strategies
Solo 401(k)Self-employed? Contribute up to $72,000/year across employee and employer contributions.SIMPLE IRASmall business with employees? Easy retirement plan with required matching.Qualified Business Income (QBI) DeductionPass-through business owners can deduct up to 20% of qualified business income.
Sources
- Internal Revenue Service, Rev. Proc. 2025-32
2026 inflation-adjusted amounts (tax brackets, standard deduction, estate & gift, FSA, credits)
- Internal Revenue Service, Notice 2025-67
2026 retirement plan limits (401(k), IRA, SIMPLE, catch-up)
- Internal Revenue Service, Rev. Proc. 2025-19
2026 HSA and HDHP inflation-adjusted limits
Educational information only. Not financial, tax, or legal advice or a recommendation. Figures are drawn from the primary sources cited above; verify current amounts with the source before acting.