For Sole Props
There are certainly benefits to making contributions to your SEP IRA. You can contribute up to 25% of your net earnings from self-employment, up to a maximum contribution limit of $66,000 (subject to annual cost-of-living adjustments). As a sole proprietor, contributions to a SEP IRA are generally deducted on your personal income tax return using Form 1040.
The amount you contribute to your SEP IRA will be reported on your tax return as an adjustment to income, which is also known as an above-the-line deduction. This means that the deduction reduces your total income, which in turn reduces your taxable income for the year.
As it relates to health insurance premiums, most self-employed taxpayers can deduct health insurance premiums, including age-based premiums for long-term care coverage. Write-offs are available whether or not you itemize, if you meet the requirements.
Heard's recommendation would be to make these payments through your personal bank account, as they are not directly "expense" line items on your profit and loss, or Schedule C, at tax time, and will be accounted for as "above the line deductions" on your personal tax return.
For S Corps
For SEP IRA, you can contribute up to $66,000 or 25% of your annual compensation– whichever is less. Therefore if your gross wages are $100k, the max to contribute is $25k.