In TurboTax Deluxe 2023 under "Deductions and Credits", "Retirement and Investments", "Other Investment Expenses", there is a line item for "IRA Custodial Fees". What can/should be entered in this field? Should IRA Custodial Fees paid directly out of an IRA be included on this line? Or should you only include IRA Custodial Fees paid with funds outside of the IRA?
@mariron wrote:
This does not answer my question. Can Custodial Fees paid DIRECTLY FROM THE IRA be entered on this line? In the past, fees paid directly out of an IRA could not be claimed as an investment expense since the money used to pay the fees was never taxed.
No. Only if paid outside the IRA would that be an investment expense.
No, this question is for a possible state credit. But even for a state credit, the fee would need to be separately paid.
Management fees paid from your IRA account have never been deductible on your federal tax return.
In addition, separately-paid IRA management fees are no longer deductible in tax years 2018 through 2025 due to the Tax Cuts and Jobs Act (TCJA) that Congress signed into law on December 22, 2017.
In 2017 and prior tax years, separately-paid IRA management fees were eligible for deduction under the 2% rule as an investment expense. And some states still allow this deduction.
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