I have only social security income and some contract income for 2009. Would it be better to open a SEP account for the contract income or contribute to my Roth IRA. Which would give better tax treatment?

mah-kug,

It depends on your overall financial situation and many other factors. This may sound crazy but I would consider other investment options, mainly hard assets such as gold, even real estate and land. It's only matter of time before inflation starts gong up and hence lower the value of any cash investments.

Here's a link with good Roth IRA informations (basic do's and don'ts, what to stay away from, etc):

http://www.rothirarules.net/roth-ira-investments.htm

and

http://www.rothirarules.net

The Roth IRA is funded with AFTER-tax income, whereas the SEP IRA is fundd with PRE-tax income.

You can deduct your SEP IRA contributions as an adjustment to income.