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Sole Proprietorship & Retirement Contributions

As a Sole Proprietor, can I deduct a monthly fee to a service that manages my retirement account?

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PoojaT27
Employee Tax Expert

Sole Proprietorship & Retirement Contributions

No the management fees for retirement plan paid as a sole preprietor is not deductible as a business expense.  The management fees for a retirement plan paid by a sole proprietor is considered investment expense which is not deductible under the current law pursuant to Tax Cuts and Jobs Act of 2017.  You can take a deduction of your contributions you make to the retirement account on your tax return depending on the type of account and your income. 

However, if you hire employees and they also participate in the retirment account set up by the business, then the management fees will qualify as a business expense. 

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