The SEP IRA Tax Write-Off: What Business Owners Miss Every Year

If you're self-employed or running a small business, you have access to one of the most powerful retirement and tax-reduction tools available: the SEP IRA. And most people are massively underusing it.

A SEP IRA allows you to contribute up to 25% of your net self-employment income, up to $69,000 for 2024. That's significantly more than a traditional or Roth IRA, and every dollar you contribute reduces your taxable income for the year.

The mechanics are simple: contributions go in pre-tax, grow tax-deferred, and are taxed when you withdraw in retirement. The setup is straightforward and the filing deadline (including extensions) gives you flexibility most other retirement vehicles don't.

Where business owners lose money: most wait until tax season, realize they owe more than expected, and wish they'd contributed more. The time to structure this is at the beginning of the year, not at the deadline.

If you have employees, there are rules to understand before you set one up. But for solo operators and small firms, a SEP IRA is often the cleanest, highest-impact move available.

We build this into the planning conversation early, because the deduction compounds, and so does the delay.