If you're a business owner, there exist several retirement plans that may meet your needs, but the simplest and least costly is the simplified employee pension IRA. Here are a few things every small-business owner needs to know about SEP IRAs.

What it is
An SEP IRA is a type of business retirement plan available to business owners and their employees. SEP IRAs offers tax-deductible contributions, tax-deferred earnings, and a variety of investment options. Any type of business, including sole proprietorships, partnerships, or corporations, can set up SEP IRAs. SEP IRAs are especially attractive to self-employed individuals without employees.

Tax advantages
Contributions made to SEP plans are tax-deductible. In fact, an SEP IRA can potentially save your business up to tens of thousands of dollars in taxes every year. In addition, eligible employees can make traditional IRA contributions to their SEP IRA accounts, allowing them to exclude income from their own individual taxes. Earnings in SEP IRAs also grow tax-deferred.

Contribution limits on these plans are remarkably high. For the 2013 tax-filing year, the SEP IRA allows contributions up to 25% of compensation or $51,000, whichever is less. The maximum amount of compensation used in determining your contribution is $255,000 for the 2013 tax year. The same percentage of compensation must be made for every employee. Also, contributions to SEP IRAs are always 100% vested, or owned, by the employee.

Business owners can exclude employees from the plan until they have worked for the business for three of the immediately preceding five years and are over the age of 21.

Cost and simplicity
An SEP is an exceptionally inexpensive business retirement plan. It also don't require special IRS filing like other plans do, which makes it even more desirable for business owners.

SEP IRAs are the only retirement plans for small-business owners that can be set up after year-end when you don't already have a plan established. You have until April 15 (or Oct. 15 if you're filing a tax extension) to open and fund a plan for the 2013 tax-filing year.

Consider establishing and funding a SEP IRA before the tax-filing deadline. You can find more information about SEP IRAs in a recent article written by fellow Fool Selena Maranjian or directly from the IRS. Then be sure to check out brokerage firms that can help you establish a plan today.

The No. 1 Way to Lose Your Wealth Without Even Knowing It
You’ve fought hard to build wealth for you and your family. Yet one all-too-common pitfall could completely derail your dreams before you even know it. That's why a company The Economist hails as "an ethical oasis" has isolated five simple questions you must answer to ensure that your financial future is really secure.

Can you answer YES to all five of these eye-opening questions?
Click here to find out -- before it’s too late!

Follow Nicole Seghetti on Twitter @NicoleSeghetti. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Compare Brokers