Annual contributions an employer makes to an employee's SEP-IRA cannot exceed the lesser of:

-- 25% of compensation, or

-- $49,000 for 2009 and 2010

The same limits on contributions made to employees' SEP-IRAs also apply to contributions made to a self-employed individual's SEP-IRA. However, special rules apply when figuring out the maximum deductible contribution. When figuring the deduction for contributions made to your own SEP-IRA, compensation is your net earnings from self-employment, which takes into account both the following deductions.

-- The deduction for one-half of your self-employment tax.

-- The deduction for contributions to your own SEP-IRA.

$49,000 should be used for 2009 and 2010 as a limit of all contributions for defined contribution plans

Please see published all COLA adjustments - http://www.irs.gov/newsroom/article/0,,id=187833,00.html

Sole proprietors and partners deduct contributions for themselves on line 28 of Form 1040.

See also IRS publication 560 - http://www.irs.gov/pub/irs-pdf/p560.pdf

Overall limit on SEP contributions. If you also make nonelective contributions to a SEP-IRA, the total of the nonelective and elective contributions to that SEP-IRA cannot exceed the lesser of 25% of the employee's compensation or $46,000 for 2008 ($49,000 for 2009). The same rule applies to contributions you make to your own SEP-IRA.

See also - http://www.irs.gov/retirement/article/0,,id=112859,00.html#22

May an employer contribute to the SARSEP for its employees?
Yes, the employer may make non-elective contributions to the SEP-IRAs of its employees subject to an annual addition limit. The annual addition limit is the lesser of 100% of the employee's compensation (limited to $245,000 for 2009 and 2010, subject to annual cost -of-living adjustments) or $49,000 for 2009 and 2010 (subject to annual cost -of-living adjustments). In determining this limit, all contributions made to the employee's SEP-IRA must be included: the amounts deferred by the employee and the non-elective contributions the employer made to the SEP-IRA. In addition, contributions made on behalf of an employee to another defined contribution plan the employer sponsors must be included in determining the annual addition limit. The same rule applies to contributions self-employed individuals make to their own SEP-IRA.

Let me know if you need any help.

$49,000 should be used for 2009 and 2010 as a limit of all contributions for defined contribution plans.

To determine your contribution limit as self-employed - you need to reduce that amount by all contributions - yours and your employer's into your 401k plan.

Thus if your contribution into 401k plan was $15500 and your employer contributed $10,000 - your overall contribution limit into SEP should be

$49,000 - $15,500 - $10,000 = $23,500.

As you are self-employed - an employee's limit would not apply to your situation - only overall limit will apply.