are investment fees for roth ira deductible
Roth IRA Fees. You might get hit with a number of different fees for your Roth IRA. Your custodian or trustee might charge you a setup fee, a maintenance fee, transaction fees when you buy or sell investments, transfer fees, withdrawal fees and advisory fees. The two big advantages of a Roth IRA are tax-deferred growth of your investments while they remain in the account, and tax-free distributions once your account becomes qualified. While you can't write off contributions to your Roth IRA, you might be able to deduct advisory fees you pay on that account. Brokers usually take commissions on IRA stock deals directly out of your account contributions. That makes them deductible, but it reduces your contributions, which max out at $5,500 as of 2013. If you pay $500 in commissions, the most you can put in your account -- after the fees are paid -- is $5,000. You might get hit with a number of different fees for your Roth IRA. Your custodian or trustee might charge you a setup fee, a maintenance fee, transaction fees when you buy or sell investments, transfer fees, withdrawal fees and advisory fees. There is no advantage in trying to pay the entire fee from a taxable account in an attempt to boost your deductions. If you pay $2,500 in management fees, it is better to pay $1,000 from an IRA with pretax dollars than to pay for it separately to get a $500 tax deduction. IRS determines that “wrap fees” paid from a taxable investment account on behalf of IRA and Roth IRA accounts are not treated as additional contributions, thereby allowing a taxpayer to deduct the cost of IRA and Roth IRA account management fees. In private letter ruling 201104061, the IRS determined that “wrap fees” charged to IRA and Roth IRA accounts paid out of taxable investment accounts are not treated as additional contributions to the IRA and Roth IRA accounts. If you are charged a general management fee for handling the account, that expense is also deductible. In most investment accounts, including IRAs, the manager charges a percentage of the account size, typically 1 percent or 1.5 percent of the assets under management. IRS determines that “wrap fees” paid from a taxable investment account on behalf of IRA and Roth IRA accounts are not treated as additional contributions, thereby allowing a taxpayer to deduct the cost of IRA and Roth IRA account management fees. Download PDF. PLR 201104061. To put it another way, if you pay those fees out of funds held in your Roth IRA, you can't take a tax deduction for them. If those fees are billed separately and you pay them with funds out of a separate, taxable account, you can typically deduct them.
Yes