A Simplified Employee Pension (SEP) plan is one such way to both reduce taxes and build your retirement portfolio. Depending on your business, you could build a sizable nest egg.
You don’t have to contribute to the plan every year. But when you do, everyone who qualifies must receive contributions, which immediately vest to employees.
Calculate your compensation as net earnings from self-employment less one-half of your self-employment tax, less contributions made to the SEP-IRA.
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