Employers, including self-employed individuals, can set up simplified employee pension (SEP) plans. A SEP plan allows an employer to make contributions toward employees' retirement, and, if the employer is self-employed, his or her own retirement, without becoming involved in more complex retirement plans.

A self-employed individual is an employee for SEP purposes. He or she is also the employer. Even if the self-employed individual is the only qualifying employee, he or she can have an IRA under a SEP plan (SEP-IRA).

This chapter focuses on the rules affecting employees. For information on the rules affecting employers, see Publication 560.

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