Account fees paid out of a traditional ira
You answered a question a few days a go that was not quite clear. Can you deduct traditional ira fees on schedule A (as investment expenses 2%)if the feees are with held right out of the traditional ira?
My understanding was the fees had to have been paid out of a taxable account.
Permalink Submitted by Alan - IRA critic on Wed, 2015-06-10 21:32
Your understanding is correct. You cannot deduct fees paid directly from the IRA. In most cases, unless the IRA is a Roth IRA, it is best to have the fees paid directly if you can because they are then paid from pre tax dollars. If the fees are paid from outside funds, the Sch A deduction is subject to the 2% AGI floor, the ability to itemize in total, possible loss of the deduction due to AMT, and even then only taxable income is reduced, not AGI.