If you are self-employed, do freelance or independent contractor work, or have your own business in addition to being employed by someone else, you may set up a tax-deductible Keogh plan (also called HR-10). This type of plan is especially helpful for women who may be out of the mainstream work force but still earning money while working from home.

A Keogh can be either a defined contribution or defined benefit plan. If you have employees, you may want to include them in your Keogh plan. The type of retirement plan you choose depends on the way your business is organized. If you are the sole proprietor, you may establish a Keogh plan for yourself and your employees. Generally, Keogh plans follow the rules for the plans previously discussed.

However, there are a few differences. The plan must be established by December 31 for contributions to be made for the current year. The contribution is not due until you file your taxes on April 15 of the following year. While your employees must be covered by the plan, your contributions on their behalf can be deducted from gross income. As an owner-employee, your contribution for yourself must be made from net income. A tax accountant will be able to help you decide which is best for you.