A self-employed owner can review retirement-plan options such as a SEP arrangement or a one-participant 401(k). These plans have different contribution structures and administrative requirements.

A one-participant 401(k) generally covers a business owner with no employees, or that owner and a spouse. Hiring eligible employees changes the analysis. SEP rules can also require contributions for eligible employees; the owner's desired contribution is not the only factor.

Calculate contributions using the correct compensation or self-employment earnings base and coordinate any other workplace plans. Adoption, election, contribution, and reporting deadlines should be reviewed before money is moved. Keep the signed plan documents and annual contribution records.

Your next steps

• Identify eligible employees and other retirement plans.
• Compare plan administration and contribution calculations.
• Confirm deadlines before opening or funding the plan.

General education, not individualized tax or legal advice. Illustrations use stated assumptions and do not promise a refund or tax saving.