Misc Tax Deduction IRA | Ed Slott and Company, LLC

Misc Tax Deduction IRA

Can investment fees, custodial fees and other expenses charged by financial advisors for managing an IRA be deducted on a Federal Tax Return as Miscellaneous Itemized Deductions to the extent they exceed 2% of adjusted gross income?

Yes, if they are billed and paid separately outside of the IRA account.

Thanks ... that was helpful. One more question, can the miscellaneous dedcutions be taken without itemizing other deductions (mortgage interest, charity, property taxes etc)?

No, you must be able to itemize in total, ie. your total itemized deductions of all types must exceed your standard deduction unless you are married filing separately. If someone has massive misc deductions, it is possible that these alone could exceed the standard deduction. Possible, but unlikely. The prior post also should be qualified. Other than administrative IRA fees, the only other IRA fees qualifying for deduction are "wrap fees", in accord with PLR 2005 07021. Such costs as advisory fees which are NOT part of a wrap fee are not deductible because they do not produce taxable income, at least not currently taxable income. If you have have an advisor's fee, the advisor should break out the fee between taxable accounts and tax deferred accounts. Only the taxable account portion would be deductible, other than the wrap fee exception ruling cited above.
 

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