When I setup my retirement plan for my self-employment income, the determining factor was the amount of money that I could contribute. Since my self-employment income is pretty small, the SIMPLE was my best bet.

SIMPLE: Can contribute up to $6,000 as employee with a match up to 3% of compensation to a maximum of $6,000, for a total of $12,000.

SEP: Can contribute 15% of compensation up to $30,000.

By doing the numbers you find that if you make more than $50,000 in profit the SEP is a better deal:

.15x = .03x + $6,000
x = $50,000

But there are a couple other issues. The SEP is a bit more flexable, since the SIMPLE is supposed to be a monthly contribution plan like a 401(k). But since you can create very liberal rules for your SIMPLE (the rules the IRS provides are the most restrictive allowed) you can allow daily contribution level changes.

A Keogh plan is also available, but they are a bit more complex, although you can contribute more.

Definately check out IRS publication 560. It is pretty well written for a goverment document.

jbw