Fee Reimbursement to IRAs
We have an account that was on boarded with an ACAT transfer fee of $95 charged at the prior custodian. We are reimbursing this fee, however, cannot do it directly to the IRA. If the client has already contributed their maximum $5,500 into this IRA for the calendar year, can they contribute an additional $95 for the transfer fee “reimbursement”?
Permalink Submitted by Alan - IRA critic on Thu, 2015-12-03 16:29
Client cannot add a contribution above the 5500 maximum (assume not yet 50). Normally for these fee reimbursements, they are added directly to the IRA by the custodian and do not count as a contribution. That removes the reimbursement entirely from tax reporting for the client and from the 5498 issued by the custodian. I don’t know why your firm cannot add the reimbursement directly. Can you check again with the top authority?