Yes, the law allows contributions to both. You can contribute to both a SEP and Roth IRA subject to income/contribution limits. Since you get the benefit of an immediate tax deduction for contributions to a SEP IRA, most find it best to max out the SEP plan first, and then contribute any excess allowed to the the R-IRA.You have until 15 April 2013 to make your contribution to both plans for the tax year 2012. I believe it's an advantage to have both a taxable IRA and tax-free account R-IRA when you retire because, to the extent allowed by law at that time, it gives you the flexibility to choose which one to draw from, depending on your tax bracket. Also, a Roth offers some additional benefits, like RMDs do not apply to the Roth owner, and qualified withdrawals are forever tax free to you, your spouse, and ultimately your kids/ heirs.You may max out the Roth, with additional contributions to the SEP.