To roll money from a 401k plan to a SEP IRA, request a distribution from your 401k plan. You can only request a distribution if you've left your job or are at least 59 1/2 years old. Once you get the money, you have to deposit it in your SEP IRA within 60 days. When you file your federal income taxes, you have to report the amount of the rollover as a nontaxable pension and annuity distribution, even though the money will not be included in your taxable income.
You can only perform one rollover per 12 month period from an account or to an account. For example, if you perform a rollover from the 401k plan to the SEP IRA, you could not perform another rollover from the 401k plan to any other retirement account for 12 months. In addition, you could not roll over the money from the SEP IRA that you rolled the money into for 12 months.
When you roll the money from a 401k plan to an SEP IRA, you can consolidate your retirement money into one account to make it easier to monitor. In addition, your SEP IRA may offer you investment options that are not available in your 401k plan. Finally, depending on your 401k plan and your SEP IRA, you might be able to take advantage of lower account fees with your SEP IRA. However, be sure to check, because some 401k plans have lower account management fees.
Make sure that you deposit the money from your rollover within 60 days. If you fail to complete the rollover within the specified time period, you will not be able to move the money into an SEP IRA. The IRS will classify the money as a permanent withdrawal from your account, making you liable for any income taxes on the money and early withdrawal penalties if you are younger than 59 1/2 years old.