Educatoin Expenses in SDIRA?

[Daniel Dietz]

I think I likely know the answer to this one, but thought I would check here too.

I am getting a good grip on the rules within a SDIRA for the most part as far as Prohibited Transactions & Self Dealing and the fact that you can manage screening showing etc... but NOT be compensated for it.

Does that mean there is no way within a SDIRA to pay for things such as a "Pro" membership here at BP, educational seminars, etc.....?

I am not even really concerned with 'writing them off' per say, but just paying for them. My IRA account is good sized but personal cash flow it a bit tight. Not sure if I should be happy for the first one or sad for the second one ;-)

Thanks, Dan Dietz

[Jeff S.]

Even if you could, this is a terrible idea. The concept behind an IRA is to allow before tax funds to grow and compound tax-free for many years. Expensing even small amounts can result in a dramatically lower retirement balance years down the road. For example, $100 compounded annually at 10% for 20 years is $672. Even after inflation, is it worth giving that up now? The double whammy is you don't even get the benefit of a tax deduction.

Regardless of how you make your return, the general strategy should be to make the maximum contributions (and I’d recommend a SD401k plan but that’s another topic), and allow them to compound tax free at the highest rate of return for as long as possible.

You should simply deduct your misc. business expenses off your personal or business return to let the government pay a percentage.