A: The good news is that fees and expenses associated with the maintenance of an IRA are deductible if they are related to the collection or production of income or the management, conservation, or maintenance of property held for that purpose. The bad news is that in order to be eligible for this deduction, the fees must be paid from non-IRA funds. In other words, if the fees came from the IRA account balance, rather than being billed directly to you, no deduction is allowed (since these fees are being paid with pre-tax dollars).
If you can, get your broker to bill you directly, rather than having them subtracted directly from your account, advises Robert Siegel, CPA and senior tax manager for Rothstein, Kass & Co. in Roseland, N.J. "Even if you do not benefit from these deductions, it may still be wise to have these fees paid from outside of the IRA in order to maintain as much money as possible in the IRA growing on a tax-deferred basis," he says.
All of the retirement accounts that you mention can be rolled over on a tax-free basis into a traditional IRA, Siegel says. "Of course," adds Siegel, "you would be unable to roll over the 401(k) account until you have separated from the service of your employer. If you have already separated from service, then there is no restriction."
GRIPES OF ROTH. As long as the rollovers are made via "trustee-to-trustee" transfer, the method you described, you may transfer the funds as often as you would like. If you actually do a true rollover -- where you receive a check from one IRA account and have 60 days to deposit the funds into another IRA account -- then you're limited to one rollover per 12-month period, Siegel says. If you were to exceed the 60-day time frame, the money would become a taxable distribution.
None of the accounts you mention can be rolled over to a Roth IRA, but it is possible to convert a traditional IRA to a Roth if you meet certain income requirements. Just be sure you realize that you will have to pay taxes on the conversion amount -- it's treated as taxable income -- in the year the conversion takes place. "In order to control the amount of taxable income created upon the conversion of a traditional IRA to a Roth IRA, you can split up your traditional IRA," Siegel says. "Roll over the portion you want to convert into a new, separate traditional IRA, and then convert that new IRA to a Roth." That way you'll be paying taxes on a smaller amount of money.
Whether it makes sense for you to convert any of your IRAs into a Roth IRA is a complicated matter with significant tax consequences. Contact a personal financial planner who can lay out the pros and cons, Siegel suggests, especially if you aren't confident that the broker you're dealing with has been honest and objective about your investments. Smart Answers columnist Karen E. Klein is a Los Angeles-based writer who specializes in covering covered entrepreneurship and small-business issues.