Your efforts involved in managing your own retirement accounts do not constitute a business and, therefore, expenses that you have that are related to managing your retirement accounts are not business expenses. However, if you use money outside of the retirement accounts to pay for expenses such as management or account fees of your retirement accounts, these expenses can be deducted as investment expenses on Schedule A subject to the 2% of AGI floor.
As Carl said, what you do with the money after being distributed from your retirement accounts is entirely separate.
Weather your funds are in a 401(k), Traditional IRA or ROTH IRA doesn't matter. Those funds are managed for exactly what they are - retirement funds. All withdrawals are reported to you on a 1099-R. What you do with those funds doesn't matter and the IRS doesn't care, so log as you pay any taxes due on the withdrawals, if applicable. So if you are using your withdrawals for a business, that's a completely separate issue having nothing to do with where that money came from.
Your efforts involved in managing your own retirement accounts do not constitute a business and, therefore, expenses that you have that are related to managing your retirement accounts are not business expenses. However, if you use money outside of the retirement accounts to pay for expenses such as management or account fees of your retirement accounts, these expenses can be deducted as investment expenses on Schedule A subject to the 2% of AGI floor.
As Carl said, what you do with the money after being distributed from your retirement accounts is entirely separate.
A home office deduction is not available for the investment-related expenses for the casual investor.
Reference: <a rel="nofollow" target="_blank" href="http://dwdcpa.com/blog/deduct-your-investment-expenses">http://dwdcpa.com/blog/deduct-your-investment-expenses</a>
But does the very act of actively managing those funds -- balancing portfolios, selecting funds, etc. -- constitute what IRS would regard as a business which yields income? And therefor expenses I incur in conducting that business aee deductible, regardless of what I do with the income?
If you paid investment expenses like safe deposit box fees or advisor fees you can only deduct the amount OVER 2% of your AGI as an investment expense if you itemize deductions. Go to……
Federal Taxes
Deductions and Credits
Choose Jump to Full List -or I'll choose what I work on
Then scroll down to Retirement and Investments
Other Investment Expenses - Click the Start or Update button
But it's usually not worth even putting in. It is a Misc Deduction and only the amount OVER 2% of your AGI is deductible. And then all your deductions have to be more than the Standard Deduction to give you any benefit.
For example, you make $20,000 AGI. Only the amount over $400 (20,000 x .02) would even be deductible. And that's only for 20,000 AGI. For like 50,000 AGI only the amount over $1,000 would be deductible.
But if it is for a 401k or IRA account you can only deduct it if you paid it with money from outside of the account.
If the fee is taken out of your IRA balance, it's not deductible. If it's billed separately to you and you pay it with your own funds, it's deductible as a miscellaneous deduction on Schedule A. And then only the amount over 2% of your AGI is deductible and then only if all your deductions are more than the Standard Deduction.