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Updated: Mar 27, 2023

Looking for employee retention and tax deduction strategies for your business, consider a Simplified Employee Pension (SEP) IRA.

If you have a business and are seeking strategies to attract, maintain and reduce corporate taxation you may want to set up a Simplified Employee Pension (SEP) IRA. In fact, a SEP IRA can be an attractive option for self-employed individuals or small business owners who want to save for retirement while benefiting from tax deductions on their contributions. Here are some of the purposes of a SEP IRA:

  • Retirement savings: A SEP IRA allows individuals to save for retirement while benefiting from tax deductions on their contributions. Both the employer and employees can contribute to the plan.

  • Employer benefits: Setting up a SEP IRA can help small businesses attract and retain employees by providing a retirement savings plan. Additionally, contributions to the plan are tax-deductible for the employer.

  • Easy to set up and administer: A SEP IRA is relatively easy to set up and maintain compared to other retirement plans. Employers can establish the plan by completing a simple form, and there are no annual filings required.

  • Higher contribution limits: SEP IRAs allow higher contribution limits compared to traditional and Roth IRAs, making it an attractive option for individuals who want to save more for retirement.

  • Flexibility: SEP IRAs are flexible in terms of contributions, meaning that employers can choose to contribute different amounts each year, depending on their financial situation.

As the sole owner of the business, you would act as both the employer and employee, and you would be able to contribute to the plan in both capacities. The contribution limits for 2023 are 25% of compensation or $61,000, whichever is less.

It's important to note that if you have employees, you must make contributions to their SEP IRAs on the same percentage of compensation basis as your own contributions. Additionally, all eligible employees must be included in the plan, so it's important to consider the impact of offering a retirement savings plan on your business.

Overall, a SEP IRA is a useful tool for retirement savings and can provide many benefits for both employers and employees. However, it's important to consult a financial advisor to determine if a SEP IRA is the best option for your specific financial situation.

To learn more about Evolve Wealth Advisors, please visit our website at Should you have any questions regarding your account or how Evolve Wealth Advisors can help with your future Estate or Retirement planning needs, please contact Peter Henry, CEO at 818-970-6940 or Patrick Kinney, COO at 503-490-0273.


This commentary is provided for general information purposes only and should not be construed as investment, tax or legal advice, and does not constitute an attorney/client relationship.

The market commentary appearing above has been prepared by personnel of and for Evolve Wealth Advisors, LP. The information contained within the commentary is provided as general market commentary only and does not constitute any form of regulated financial advice, legal, tax, or other regulated financial service. It is not considered to be investment research or a research recommendation, as it does not constitute substantive research or analysis. Any charts or graphs do not reflect past or current recommendations by Evolve Wealth Advisors and should be considered an academic treatment of empirical data. Investors should consult their financial advisor when applying the assumptions of any chart or graph.

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