All contributions you make to both your SEP and your employees’ SEP are tax-deductible.
Annual contributions an employer makes to an employee’s Self-Directed SEP IRA cannot exceed the lesser of:
• 25% of compensation, or
• $61,000 for 2022 and $66,000 for 2023 (subject to annual cost-of-living adjustments for later years).
These limits apply in the aggregate to the contributions an employer makes for its employees to all defined contribution plans, which includes SEP IRAs.
• Only up to $305,000 of employee’s compensation may be considered for 2022 and $330,000 for 2023.
• Contributions must be made in cash-property can NOT be contributed.
Employees have complete control over his/her contributions.
You have the freedom of choice to decide what percentage you contribute each year keeping in mind that the percentage you contribute must be the same for all employees.
You may make contributions up until you file your tax return each year, including extensions.