Distributing Funds In SEP IRA

It's really important to know the rules governing the distribution of funds contained in SEP IRA. Rule number one is that you can not take loans from your SEP IRA. However, participants (you) can make withdrawals at any time. These funds can be transferred over tax free to another SEP-IRA, to another traditional IRA, or to another employer's qualified retirement plan (provided the other plan allows rollovers). Money withdrawn from a SEP IRA (and not rolled over to another plan) is subject to income tax for the year in which an employee receives a distribution. If an employee withdraws money from a SEP-IRA before age 59½, a 10 percent additional tax generally applies.