Financial Planner 401k Management Fees

[mgc6288]

I understand the IRA fees are not deductible but we provide a 401k and are switching to a CFP who charges a quarterly fee to manage.  Is this fee deductible from our 1120S tax form?

[Mike9241]

There’s an exception at the federal level: 401(k) fees are deductible to employers. If you own a business or are self-employed and sponsor a 401(k) plan, the plan administration fees, trustee fees, and other costs you pay can typically be treated as ordinary business expenses.

Section 162 of the tax code lets businesses deduct “ordinary and necessary” expenses, and that includes the cost of running a retirement plan for employees. 

there would be an issue if the CFP managed your personal IRA's and charged the fee to the corporation. 

[mgc6288]

I figured as such!  Yes this is a business Roth 401k and my new CFP is handling this for my company.  He will be deducting a percentage every quarter.  Where would I document this expense on the 1120S?

My guess is 1120S, Line 20 "Other Deductions" and then attached a statement for "Legal Services" or "Professional Services"?  "401k Management"?