From the course: Business Tax Foundations

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Using a SEP to reduce your annual taxes

Using a SEP to reduce your annual taxes

From the course: Business Tax Foundations

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Using a SEP to reduce your annual taxes

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- [Instructor] Very few people like paying taxes. One of the best ways to reduce your taxes is to contribute to tax-deferred retirement accounts. SEP retirement accounts, S-E-P, SEP, are by far the best tax advantage retirement accounts out there in my opinion. They have a much higher contribution limit than anything else that I'm aware of that you can use as a small business owner, and they're independent of 401ks, so they're great for people running a part-time business or an independent side gig. But, there are some land mines you need to avoid though. Let me talk you through it. Now, the primary form that you're going to use when dealing with SEPs to start with is the 5305-SEP. And this essentially just says the amount of money that you're going to contribute based on particular services of given employees. The first land mine you want to be aware of with the SEP account is that if you have a business, you have to contribute money to a SEP IRA on behalf of all employees that meet…

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