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Oliver6 · ‎June 28, 2023

Hi,

If your goal is to contribute to a SEP IRA and you meet the requirements, generally, that should be fine. Please see:

As per link above:

Employees must be included in the SEP plan if they have:

attained age 21;
worked for your business in at least 3 of the last 5 years;
received at least $750 in 2022; $650 in 2021 and 2022; $600 in compensation (in 2016 - 2020) from your business for the year.

Your plan may use less restrictive requirements, for example age 18 or three months of service, to determine which employees are eligible.

You can set up a SEP plan for a year as late as the due date (including extensions) of your business's income tax return for that year."

As for popular alternatives to SEP IRA, there are many retirement vehicles to help lower your taxable income, if that's your goal. Please see:

2022 Contribution Limits

IRA: $6000 ($7000 if 50 or older)

401k: $20,500 general deferral limit