If you’re the type of active investor who prefers to stay engaged with the oversight of your investments, you are likely already well versed in the wide array of investment opportunities available through a self-directed IRA. Contrary to common belief, your IRA account has almost limitless investing potential. Despite your investment savvy, you may have a few questions about covering IRA investment costs. Can you, as the IRA account holder, finance the expenses of your retirement plan with your own personal funds?
Need to pay a bill for one of your account-owned assets? Access the Client Portal and choose “Pay Bills” on the left side of the screen.
Covering Investment Costs
Your IRA is a separate legal entity from you, even though you decide what happens with it. Consequently, your IRA must pay any expenses incurred. Neither you nor any disqualified persons may use personal funds to cover such expenses. An exception to this rule applies to NDTCO administrative fees, which you can either pay from your account funds or with your personal credit card.
The details of this process are fairly intuitive, as long as you understand the basic tenants of an IRA. Although an IRA may be owned by a client, it’s helpful to look at it as a sovereign entity. The reason IRA administrators like New Direction Trust Company exist is that the IRS wants to keep IRA owners at an arm’s length from their IRA investments.
Because an IRA is its own legal entity, any money that is earned through its investments or owed for its expenses must flow through IRA itself. New Direction Trust Company makes this process as easy as possible with our online bill pay functionality.
To pay a bill for an account-owned asset:
- Log in to the Client Portal.
- Click “Pay Bills” on the left-hand column of the screen.
- Choose the applicable asset from the drop-down menu and click the “Pay Now” button.
If your account collects rent or loan payments, your renters or borrowers can:
- Visit the Client Portal, but they won’t have to log in.
- Instead, they will click the “Pay Now” button and follow the prompts.
New Direction Trust Company is paving the way in technologically advanced payment processes for self-directed IRA administrators. NDTCO has created an online bill payment environment that reduces fee processing times down to one business day, all without any additional fees. You can also conveniently track your payment activities through your online dashboard in a similar manner to a bank account.
Remember, you and your IRA account are friends but are not one and the same. Your IRA’s profits and expenses must be managed through your IRA alone – A provision that allows you to bask in the tax benefits that IRA accounts have to offer! For more information about self-directed investing, feel free to give us a call at 877-742-1270 or send us a message through the Client Portal.