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If you're a sole proprietor or small-business owner, a Simplified Employee Pension-Individual Retirement account is an easy-to-administer plan that permits you to set aside money for retirement in a tax-deferred account.

As a sole proprietor, you may contribute the lesser of 20% of your profits from self-employment (net profit minus one-half of your self-employment tax) or $40,000. If your business is incorporated, you may contribute the lesser of 25% of compensation or $40,000. You can also make "employee," or personal, contributions to your account of up to $3,000 for tax-year 2003, plus up to $500 in additional contributions if you're age 50 or over. (These are the same limits that apply to a traditional IRA or Roth IRA; note that personal contributions to traditional IRAs, Roth IRAs, and SEP-IRAs combined can't exceed this limit.) These personal contributions can be either deductible or nondeductible, depending on your income and other factors.