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Setting Up A SEP-IRA

You can set aside retirement money even though you're the boss.

This story appears in the August 1997 issue of Business Start-Ups magazine.

Cooking for an easy way to cut your business taxes? Open a tax-deferred retirement account created just for small-business owners. One plan, the Self-Employed Pension-Independent Retirement Account, also known as the SEP-IRA, is designed to be easy to open and maintain, while taking advantage of tax-free investing.

The SEP-IRA account is available to anyone earning income from self-employment. You can open a SEP-IRA whether you are running your business part time or full time, and whether your company is structured as an S corporation, a partnership or a sole proprietorship. Of the three major plans--the Keogh, SEP-IRA and, for the 1997 tax year, the Savings Incentive Match Plan for Employers (SIMPLE), only the SEP-IRA permits contributions even if you're covered by another plan, such as a 401(k), at another job. A SEP-IRA is as easy to open as a standard IRA account and offers the most flexible funding options.

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