What is the difference between a SEP and Traditional IRA?

An IRA that accepts Simplified Employee Pension (SEP) plan contributions (sometimes called a SEP IRA) is nothing more than a Traditional IRA funded by employer contributions under an employer’s SEP plan, or employee salary deferral contributions under a salary reduction SEP plan. Once the employer or employee makes a SEP plan contribution to an IRA, the contribution becomes Traditional IRA assets subject to IRA rules and regulations. 

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