Small Business Dictionary

Simplified Employee Pension Plan (SEP IRA)

A Simplified Employee Pension Individual Retirement Account (SEP IRA) is a flexible, tax-deductible investment for business owners and their employees. Easy to set up and maintain, a SEP IRA is for employees 21 or older who have worked for at least three of the previous five years for that employer, and received at least $500 in compensation during the tax year. (See this IRS article for more information.)