The SEP can be rolled over to the 401(k) provided that the 401(k) plan agreement permits the rollover. However, such a rollover will increase the likelihood that the 401(k) plan balance reached the $250,000 threshold above which you must file Form 5500-EZ each year for the 401(k).
You will not have an RMD for 2017 from the SEP IRA since the SEP IRA did not exist on December 31, 2016. If you roll the entire SEP IRA balance to the 401(k) by December 31, 2017, you won't have an RMD for the SEP plan for 2018; the RMD requirement on that money will be transferred to the 401(k), adding the same RMD amount to your 401(k) plan for 2018. Your 401(k) will be subject to RMDs because you are more than a 5% owner (in fact, you are 100% owner) of your self-employment business under which the plan will be established. Instead of rolling the SEP IRA over to the 401(k), I would instead consider converting the SEP IRA to a Roth IRA, paying the taxes on the conversion, then leaving the Roth IRA to grow with the growth being tax free once 5 years have elapsed from the beginning of the year for which you first established a Roth IRA. (If this would be your first Roth IRA, a Roth conversion in 2017 would result in the Roth IRA growth being tax free beginning in 2022.) A Roth IRA does not have RMDs. If you waited until 2018 before converting to Roth, you would have to complete the SEP IRA's 2018 RMD before converting the remainder. You'll also want to consider rolling over to a Roth IRA portions of the 401(k) to avoid RMDs on that money as well. If the marginal tax rate on the conversion or rollover is the same as the marginal tax rate that you would expect to pay on regular withdrawals from the SEP IRA or 401(k), it generally pays convert or roll over; it's not all about immediate tax savings, think long-term.
Setting up a SEP plan is trivial. Most custodians have you use IRS Form 5302-SEP to establish the plan, then you open a SEP IRA account the same way as a regular traditional IRA, but, by default, the custodian reports contributions as being SEP contributions instead of regular personal contributions. Setting up a solo 401(k) plan is a bit more involved and has more recordkeeping to support your deferral election, your employer contributions, and to file Forms 5500-EZ when the balance gets high enough.
