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A SEP-IRA (Simplified Employee Pension Individual Retirement Arrangement) is a type of retirement savings plan in the United States. It's designed to allow self-employed individuals and small-business owners to make tax-deductible contributions towards their own, and their employees', retirement savings.

SEP-IRA contributions are made by the employer only, and the employer can decide each year whether, and how much, to contribute. The contribution amount can vary from year to year, providing flexibility to businesses with fluctuating incomes.

Contributions to a SEP-IRA are made on a pre-tax basis, meaning they lower the taxable income of the participant for that year. The funds then grow tax-deferred until withdrawal. Distributions in retirement are taxed as ordinary income.

The maximum contribution limit was the lesser of 25% of the employee's compensation or $58,000 for the year, but these limits are subject to cost-of-living adjustments, so they may be higher now. Please check with a financial advisor or the IRS for the most current information.

The main advantages of SEP-IRAs are their simplicity to set up and administer, high contribution limits, and flexibility in annual contributions. However, unlike a 401(k), a SEP-IRA does not allow employees to make their own contributions.

Please note that tax laws can be complex and change over time, so it's always a good idea to consult with a tax or financial advisor for the most current and applicable information.

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