Contribution Deadline

• To take a tax deduction for the money you contribute to your SEP-IRA, you must make that contribution by the tax filing deadline. This deadline is usually April 15, but if that date falls on a weekend or a holiday it may be extended by the IRS. You can check with your accountant or tax preparer for the exact due date. You can make partial contributions to your SEP-IRA throughout the year, providing you do not go over the total allowable contribution based on your income. As a sole proprietor, your income probably varies from month-to-month, so you will need to carefully record your earnings to estimate your SEP-IRA contributions.
  
  

Choose an Administrator

• You can choose from a number of plan administrators when setting up your SEP-IRA. How you set up your SEP-IRA depends on a number of factors, including the types of investments you want to buy within the account and the costs associated with creating and maintaining the account. If you set up your SEP-IRA with a brokerage firm you will have access to any individual stock you want to buy. If you prefer to use mutual funds for the bulk of your SEP-IRA investing, looking for a low cost mutual fund company can keep your costs down. If you prefer to invest your SEP-IRA money more conservatively, you might want to use a bank or credit union as your administrator.
  
  

Flexible Contributions

• According to the IRS, one of the benefits of the SEP-IRA is the ability to make contributions as you wish. Some other retirement plans require sole proprietors and small business owners to contribute the same percentage of their self-employment income every year, but with a SEP-IRA you can contribute as much or as little as you want in any given year. If you have a great year, you can contribute the maximum amount to your SEP-IRA. If your earnings fall the next year you can scale back those contributions until things are better.
  
  

No Filing Requirements

• According to the IRS guide to SEP-IRAs, another possible advantage of the plan is that there are no IRS reporting requirements for the employer. That means as a sole proprietor you do not have to complete annual reports on the plan and submit them to the IRS. If you choose an individual 401k plan instead, you do have reporting requirements to follow, and those requirements can make the plan more cumbersome, and more costly, to administer.