Fees for SEP plan

[lydia33]

Taxpayer (dentist) has sep for employees and self. Two different investment firms involved. The amount he has to pay on the employee plans for management fees is deductible. Are the fees he pays for his retirement plan deductible?

[Booger]

If an individual's IRA advisory fee is a miscellaneous itemized deduction (2% of AGI),

why wouldn't the SEP fee have the same treatment?

Booger

[joelgilb]

If an individual's IRA advisory fee is a miscellaneous itemized deduction (2% of AGI),

why wouldn't the SEP fee have the same treatment?

Booger

You Picked another one BOOGER!

Yes they are misc itemized deductions just like advisory fees.

Joel

[lydia33]

These are management fees. Charges for maintianing the accounts.

[indyscott]

Fees that are assessed for managing the entire SEP plan I would treat as ordinary business expense, part of the employee benefits expense.

[Randall]

If the individual account fees are deducted from the IRA account, no deduction. They have to be paid with money from outside the IRA.

I agree on the plan fees paid by the employer, business deduction.

[Lion EA]

Even if only participant is the owner/sole proprietor?

[indyscott]

If not for the business activity of the sole proprietor there would be no SEP fees, so why would the fees not be an ordinary business deduction.

The owner could hire an employee who would have to be advised of the existence of the SEP plan, and possibly participate.

[lydia33]

The amounts are paid seperate from the actualy contriburtion for the IRA's. I can not find anywhere in the code this addresses or in any books, from schools, etc. I do not want to make a wrong deduction, but it does look like they would be decuctibale as a bussiness expense.

[jainen]

>>If not for the business activity of the sole proprietor there would be no SEP fees<<

The same could be said of a traditional IRA, in that it must be based on earnings. But that doesn't make it a business asset, and it doesn't make the maintenance fees a business expense.

The rules are different for the owner and the employees. When the owner pays for the underlings, it goes on Schedule C like other compensation costs. When he pays for himself, it goes on Schedule A like other investment costs.