How to Pay for Investment Expenses in Your SDIRA

Estimated reading time: 3 minutes

During your time investing with a Self-Directed IRA, chances are there will come a time when your IRA will incur some sort of expense. When this does occur, you will want to know how to ensure those are handled… and handled correctly. First and foremost, you must understand that if your Self-Directed IRA is the one incurring the expense, it will be the one who will have to pay for that expense.

The good news is, paying for expenses is easy at Quest! Whether it be property taxes, HOA dues or utilities and more, we’ve made it simple to ensure your Self-Directed IRA expenses are being paid. In a few simple steps, you can submit a request to have your IRA pay an expense and we’ll take care of sending those funds right away.

Ways to Submit a Payment Request

When you’re ready to have your IRA pay an expense, you’ll want to use our Expense Pay feature in your Client Portal or access the Payment Authorization Letter on our website, commonly referred to as a “PAL”. This is what will allow permission for Quest Trust Company to make a payment from a client’s Self-Directed account. 

To process an Expense Pay Quest requires supporting documentation, like an invoice or receipt. This will help our Accounts Payable team gather all the needed information to ensure accuracy and compliance. If you are submitting the PAL form you will send your supporting documentation in along with the form. If you are using your Expense Pay feature in the Client Portal, you will have the ability to upload the invoice at the same time.

What Information is Needed for a Payment Request

When you are submitting this request to the Quest office, we will need you to provide some investment information. Details such as property address and percentage of ownership will be needed. Also, specific information related to the expense, like amount of the expense, what type, what it is for, and where we will need to send the funds will also be required when you are submitting the request. 

You have the option to set up reoccurring expense payments, too. On the PAL form, you will have the ability to select if the expense will be monthly, yearly, etc. If you are submitting the request through Expense Pay, you can always email the Accounts Payable team to request this submission be reoccurring. The Accounts Payable team will be your #1 resource when it comes to any of your outgoing Self-Directed IRA funds. 

As a final reminder, it’s so important to remember that your IRA must pay for any expenses that it incurs; be sure to never pay for Self-Directed IRA expenses with your personal funds or else you could get caught doing a prohibited transaction. If you ever have questions about how to pay for your IRA expenses, you can give a Quest representative a call at 281.492.3232. and we’ll be happy to help! To learn more about how to get started investing with a self-directed IRA, schedule a 1-on-1 consultation with an IRA Specialist by clicking HERE.