Employers can contribute up to 25% of the salaries that each employee earns up to an annual maximum limit. For 2017, that maximum is $54,000.

Note that the 25% limitation works a little differently for those who are self-employed. In that case, the 25% refers to the self-employed worker's net earnings from the business. To calculate that figure, you have to start by taking out the half of the self-employment tax, which represents the employer's portion of the payroll taxes that go toward Social Security and Medicare. Next, you have to account for the fact that the contribution to the SEP IRA reduces the taxable earnings from the business.

The net result of that math is that the 25% limitation on net earnings works out to 20% of your adjusted profit after the self-employment tax adjustment.

Keep in mind that Congress may change the tax law for 2018.