SEP possible for SE person?

[Snowdog90218]

Can a sole proprietor set up a SEP IRA for his first year of operations?

[TaxGuyBill]

Yes.

Just be aware that employer retirement contributions (such as a SEP) reduce business income for purposes of the QBI §199A deduction, while contributions to Traditional IRAs don't do that (but both affect "taxable income", which may affect the QBI §199A deduction. So depending on the taxpayer's situation, maxing out Traditional IRAs before contributions to a SEP may be beneficial in some cases.

[ATSMAN]

If There is significant QBI you have to calculate the return with and without SEP to figure out which way is better.

[TomJ]

Yes. You have up until the extended due date of the tax return to create the SEP plan (https://www.irs.gov/pub/irs-pdf/f5305sep.pdf), open the IRA, and fund it with the amount of the contribution.