Question and background:
I'm a self-employed sole proprietor. Can I do a sort of "backdoor" Roth by contributing a (deductible) amount to a SEP-IRA (such as the maximum) and then in the same tax year (indeed just days later) convert that full amount to a Roth IRA (paying taxes on that income)? Would that affect that single year's tax return as first a reduction in taxable income, but then an addition of the same amount for the conversion income?
You can do this, but it's not really a true "back door" Roth IRA conversion. Rather, it's just a conversion of a pre-tax retirement plan to a Roth IRA.
You're correct that you'd take an income tax deduction for SEP-IRA contributions in the year to which the contributions apply (up to April 15 of year after, or later with tax filing extension). Generally, this is up to 25% of compensation or $52,000 in 2014, whichever is lower. But there are special rules for the self-employed...see IRS Publication 560. The conversion would then add back the converted amount as taxable income in the year in which the conversion took place.
So as you're working on quickly building your Roth IRA balances, it becomes a question of managing the tax hit now vs. thinking about your probable tax bracket in retirement and the benefit of having multiple sources from which to tax-manage your future retirement income.
In 2014, in addition to making deductible SEP-IRA contributions, you can make a nondeductible Roth IRA contribution ($5,500 or $6,500 if age 50+). If you're married, you can also make a spousal Roth IRA contribution. Eligibility to make a Roth IRA contribution phases out between $114,000 to $129,000 of modified adjusted gross income (MAGI) if you're a single filer, or $181,000 to $191,000 if you're married filing jointly.
Beyond straight Roth IRA contributions, you might want to consider multi-year conversions from your SEP-IRA so you don't take the tax hit all at once. One strategy would be to "use up" the room that's left in your current bracket (federal/state) by converting only so much that you don't get pushed into the next higher tax bracket.
Hope that helps. All the best.