Defined Benefit Plan for Small Business Owners: The Retirement Account That Lets You Contribute Six Figures

Most small business owners will retire with far less than they need — not because they didn’t earn enough, but because nobody told them about the most powerful retirement account available to them. While employees quietly max out their 401(k) at $23,000 per year and call it a day, a defined benefit plan small business owners can set up allows contributions of $100,000, $200,000, or even more annually — all tax-deductible. The IRS allows it. Actuaries calculate it. And the vast majority of self-employed professionals have never heard of it.

According to the U.S. Department of Labor’s Employee Benefits Security Administration, fewer than 20% of small businesses with fewer than 10 employees offer any retirement plan at all. Meanwhile, the Federal Reserve’s 2022 Survey of Consumer Finances found that the median retirement savings for Americans aged 55–64 sits at just $185,000 — a figure that covers roughly three to four years of average retirement spending. For self-employed individuals, who lack access to employer-sponsored matching programs, the gap is even more alarming.

In this guide, you’ll learn exactly how a defined benefit plan works for small business owners, how much you can actually contribute based on your income and age, how it compares to every other retirement account on the market, and the precise steps to set one up before this tax year ends. Whether you’re a physician, attorney, consultant, or independent contractor earning $150,000 or more annually, this article will show you how to legally shelter six figures from taxes — starting today.

What Is a Defined Benefit Plan?

A defined benefit plan is a qualified retirement plan in which the retirement benefit — not the contribution — is fixed in advance. Unlike a 401(k), where what you put in determines what you get out, a defined benefit plan promises a specific monthly benefit at retirement, typically calculated as a percentage of your average salary over your highest-earning years.

Because the benefit is defined, an actuary works backward to determine how much must be contributed each year to fund that future promise. The result is a contribution that can be far larger than any other plan type allows — and entirely deductible as a business expense.

The Two Types: Traditional Pension vs. Cash Balance Plan

There are two common structures for defined benefit plans used by small business owners. The first is the traditional defined benefit plan, which defines retirement income as a monthly annuity, often expressed as a percentage of final salary multiplied by years of service. The second — and more popular for small business owners today — is the cash balance plan.

A cash balance plan mimics the look and feel of a 401(k): each participant has a hypothetical account balance that grows each year by a “pay credit” (a percentage of salary) and an “interest credit” (a guaranteed rate). However, it is legally classified as a defined benefit plan and therefore carries the same sky-high contribution limits.

According to the IRS’s official guidance on defined benefit plans, the maximum annual benefit that can be funded is the lesser of 100% of average compensation or $275,000 (2024 limit, indexed for inflation). This single rule is what makes these plans so powerful for high-income small business owners.

How the “Defined Benefit” Promise Works

The promise behind a defined benefit plan is straightforward: the plan sponsor (you, the business owner) guarantees a retirement income. You bear the investment risk — not the employee or yourself as participant. If the plan’s investments underperform, you must contribute more to make up the shortfall.

This is fundamentally different from a 401(k), where the employee bears all investment risk. The added responsibility of funding a guaranteed benefit is what makes the plan complex — and what justifies the dramatically higher contribution limits the IRS grants it.

Defined Benefit Plan vs. Other Small Business Retirement Options

To understand just how powerful a defined benefit plan is, you have to see it side-by-side with every other retirement plan available to self-employed individuals and small business owners. The difference isn’t marginal — it’s transformational.

Plan Type	2024 Max Contribution	Catch-Up (50+)	Best For
Defined Benefit Plan	Up to $275,000+	Built into actuarial calc	High earners, age 45+
Solo 401(k)	$69,000	+$7,500 = $76,500	Self-employed, any age
SEP-IRA	$69,000 (25% of comp)	None	Simple setup, variable income
SIMPLE IRA	$16,000	+$3,500 = $19,500	Businesses with 1–100 employees
Traditional IRA	$7,000	+$1,000 = $8,000	Supplemental savings

The numbers tell a stark story. A 55-year-old physician earning $500,000 per year who maxes out a Solo 401(k) shelters $76,500 from taxes. That same physician with a properly designed defined benefit plan could shelter $200,000 or more — saving $70,000–$90,000 in federal and state income taxes annually.

Why the SEP-IRA Falls Short for High Earners

The SEP-IRA is a popular choice among self-employed professionals because of its simplicity. Contributions are limited to 25% of net self-employment income, up to $69,000 in 2024. For someone earning $276,000 or more, that cap is reached quickly — and there’s no catch-up provision for those over 50.

The Solo 401(k) is more flexible, allowing both employee and employer contributions. But even combined, its hard cap of $76,500 (for those 50+) is dwarfed by what a defined benefit plan allows. If you’re in the 37% federal tax bracket, the difference between a $76,500 and a $200,000 annual contribution represents over $45,000 in tax savings — every single year.

The Solo 401(k) + Defined Benefit Combination

Here’s the strategy most financial advisors don’t mention: you can run both a defined benefit plan and a Solo 401(k) simultaneously. The Solo 401(k) employee contribution ($23,000, or $30,500 with catch-up) stacks on top of the defined benefit plan contribution. This combination can push total annual contributions to $300,000 or more for high earners over 50.

This pairing also gives you investment flexibility. The Solo 401(k) can hold stocks, bonds, ETFs, and even alternative investments. The defined benefit plan is typically invested more conservatively, as it must meet its guaranteed return assumptions. Together, they create a comprehensive, tax-efficient retirement structure.

How Contribution Limits Are Calculated

Unlike a 401(k) with a fixed IRS limit, defined benefit plan contributions are not one-size-fits-all. They are individually calculated each year by a licensed actuary based on three primary factors: your target retirement benefit, your age, and your years until retirement.

The older you are, the larger your required annual contribution — because there are fewer years to accumulate the funds needed to deliver the promised benefit. This is actually an advantage for business owners in their 50s and 60s who are playing catch-up on retirement savings.

Sample Contribution Amounts by Age and Income

Age	Annual Income	Approx. Max DB Contribution	Estimated Annual Tax Savings (37% bracket)
45	$300,000	~$90,000	~$33,300
50	$400,000	~$140,000	~$51,800
55	$500,000	~$185,000	~$68,450
60	$500,000	~$245,000	~$90,650
62	$600,000	~$275,000+	~$101,750+

These are approximations. The actual contribution is set by an enrolled actuary who files IRS Form 5500 annually. The actuary must certify that the plan is adequately funded — and the contribution required is the amount needed to hit the target benefit by retirement age.

The IRS Maximum Benefit Rule

The IRC Section 415(b) limit caps the annual benefit a defined benefit plan can pay at retirement. For 2024, that limit is $275,000 per year, paid as a life annuity beginning at age 62. This limit is indexed for inflation each year — it was $265,000 in 2023 and has grown steadily over the past decade.

If your plan is designed to deliver the maximum benefit of $275,000 per year at retirement and you’re 60 years old, the actuary will calculate that you need to contribute a very large sum annually to fund that benefit in just two years. That’s why older business owners often see contributions north of $200,000 annually — the IRS allows it because the math demands it.

Who Should Use a Defined Benefit Plan?

A defined benefit plan is not the right tool for every business. It works best in specific situations — and identifying whether you fit the profile is the first step toward deciding if it’s worth pursuing.

The Ideal Profile

The defined benefit plan for small business owners is most effective when the owner meets several criteria. First, you must have stable, high net income — ideally $150,000 or more per year in net self-employment income. Because contributions are mandatory once the plan is established, inconsistent earnings create funding risk.

Second, you should be age 45 or older. Younger business owners often do well with a Solo 401(k), which is cheaper to administer and more flexible. But once you hit your mid-40s, the actuarial math begins tipping dramatically in your favor — older participants can contribute proportionally more because they have fewer years to fund the promise.

Third, the plan works best for owners with few or no employees. If you have employees, you may be required to cover them too — which increases your cost significantly. Sole proprietors, single-member LLCs, S-corps with no non-owner employees, and partnerships between spouses are the sweet spot.

Professions That Benefit Most

• Physicians and dentists with private practices
• Attorneys and law firm partners
• Management consultants and executive coaches
• CPAs and financial advisors in independent practice
• Real estate investors with significant net income
• Technology contractors and freelance engineers

For business owners who are actively managing their tax exposure and approaching retirement with fewer than 15 years on the clock, a defined benefit plan small business structure is often the single most impactful financial move available. If you’ve already explored strategies like the Roth IRA vs. Traditional IRA decision in your 50s, a defined benefit plan is the natural next layer of tax planning to explore.

The Tax Advantages in Depth

The tax benefits of a defined benefit plan small business structure go beyond simple contribution deductibility. Understanding all the layers helps you appreciate the full financial impact — and communicate it effectively to your accountant or financial advisor.

Federal Income Tax Deduction

Every dollar contributed to a defined benefit plan is fully deductible as a business expense in the year of contribution. For a business owner in the top 37% federal bracket contributing $200,000 annually, that’s a $74,000 federal tax reduction — every year. Add state income taxes (which range from 0% to 13.3% in California), and the total tax savings can exceed $90,000 annually.

The assets inside the plan then grow tax-deferred. You pay no tax on dividends, interest, or capital gains as long as the money stays in the plan. This compounding effect over 10–20 years is extraordinarily powerful for wealth accumulation.

Self-Employment Tax Considerations

For sole proprietors and single-member LLC owners, defined benefit plan contributions reduce net self-employment income — which in turn reduces self-employment taxes (15.3% on the first $168,600 of net earnings in 2024, 2.9% above that). This is an additional savings layer that many advisors overlook when calculating the plan’s total benefit.

S-corporation owners who pay themselves a reasonable salary should note that contributions to the defined benefit plan are made by the corporation, not the individual. This means they are deducted at the corporate level and do not affect the owner’s W-2 wages or payroll tax calculation directly. The IRS Publication 560 on retirement plans for small businesses covers these distinctions in detail.

Estate Planning Benefits

Assets held inside a defined benefit plan pass outside of probate if properly structured with beneficiary designations. They also receive creditor protection in most states — making them an important part of asset protection planning for business owners in litigation-prone professions. For broader retirement income planning, understanding how these assets interact with your Social Security claiming strategy as a couple can significantly improve your retirement income picture.

How to Set Up a Defined Benefit Plan

Setting up a defined benefit plan requires more steps than opening a SEP-IRA or Solo 401(k), but the process is well-established and manageable with the right professionals. The IRS requires the plan to be formally adopted — in writing — before December 31 of the first year you want to claim deductions.

The Key Professionals You Need

You will need three professionals to establish and maintain a defined benefit plan. First, a Third-Party Administrator (TPA) who specializes in qualified retirement plans. They draft the plan document and ensure it meets IRS requirements. Second, an enrolled actuary — a professional credentialed by the Joint Board for the Enrollment of Actuaries — who calculates your annual contribution requirement and certifies the plan’s funding status. Third, a financial advisor or custodian to hold and invest the plan assets.

Some firms bundle all three services. All-in annual fees typically range from $2,000 to $5,000 for a single-participant plan. For the tax savings generated, this cost is almost always negligible — and every penny is deductible.

The Plan Document and IRS Filing Requirements

The plan must be established under a written plan document that meets IRS qualification requirements under IRC Section 401(a). You can use a prototype or volume submitter plan document (pre-approved by the IRS) or a custom individually designed plan.

Once assets exceed $250,000 (or the plan has more than one participant), you must file IRS Form 5500 annually. Plans with one participant and under $250,000 in assets file the simplified Form 5500-EZ. The actuary must sign Schedule SB (the actuarial information schedule) attached to Form 5500 each year. Missing this filing can result in significant penalties — up to $250 per day, capped at $150,000 per plan year under current law. If you’re simultaneously streamlining your business’s financial infrastructure, consider reading how one small business owner replaced traditional accounting software with fintech payroll tools to manage payroll deductions and contributions more efficiently.

What Happens If You Have Employees?

One of the most important considerations for any small business owner evaluating a defined benefit plan is the treatment of employees. Under ERISA, if you have eligible employees, you generally must include them in the plan — and fund benefits for them too.

Coverage and Nondiscrimination Rules

The IRS imposes nondiscrimination testing on qualified plans to ensure they don’t disproportionately benefit owners and highly compensated employees at the expense of rank-and-file workers. Defined benefit plans must pass tests including the minimum coverage rules under IRC Section 410(b) and the general nondiscrimination rules under Section 401(a)(4).

For a solo business owner with no employees, these rules are largely irrelevant. But if you have even one part-time employee who works 1,000 or more hours per year and is at least 21 years old, they may need to be covered. The cost of funding benefits for employees can significantly reduce — or completely eliminate — the financial advantage of establishing the plan.

Strategies to Minimize Employee Coverage Costs

Several legitimate strategies can minimize the cost of covering employees. A two-tier benefit formula can provide a modest but compliant benefit for employees while preserving the majority of the contribution capacity for owners. Age-weighted formulas — which are nondiscriminatory but allocate more to older participants — can also favor an older owner compared to younger employees.

Some employers structure the business to exclude part-time workers by requiring a one-year wait for plan eligibility and setting the eligibility threshold at 1,000 hours. Independent contractors are not employees and need not be covered — though the IRS scrutinizes worker classification carefully. A plan consultant can model the employee cost before you commit, so you can determine whether the math still works in your favor.

Risks, Costs, and Downsides to Know

A defined benefit plan is powerful — but it’s not without significant obligations and risks. Understanding the downsides is essential before you commit.

The Mandatory Funding Obligation

Unlike a SEP-IRA or Solo 401(k), where you can skip contributions in a bad year, a defined benefit plan creates a mandatory annual funding requirement. Once the plan is established, you must make the actuarially required contribution each year, regardless of business performance. Underfunding the plan triggers IRS excise taxes equal to 10% of the funding shortfall — rising to 30% if not corrected promptly.

This means a defined benefit plan is genuinely unsuitable for business owners with highly variable income. If your net income can swing from $400,000 to $100,000 depending on the year, locking yourself into a $150,000 annual contribution could create serious cash flow problems. This is one area where the flexibility of a well-structured retirement portfolio with flexible allocation becomes especially important.

Plan Termination Complexity

Terminating a defined benefit plan is not as simple as closing a bank account. The plan must be formally terminated through a specific IRS process. All accrued benefits must be fully funded at termination. Excess assets revert to the employer — but only after a 20% excise tax is assessed on the surplus (in addition to ordinary income tax). Alternatively, the excess can be transferred to a 401(k) without penalty if structured correctly.

Plan termination typically takes 12–18 months and involves participant notifications, PBGC filings (for plans covered by the Pension Benefit Guaranty Corporation), and final government filings. It’s a significant administrative undertaking — another reason to only establish the plan if you’re committed for the long term.

Investment Risk Falls on the Employer

In a 401(k), employees bear all investment risk. In a defined benefit plan, the employer guarantees the benefit — so the employer bears the investment risk. If the plan’s assets earn 4% instead of the assumed 6%, you must increase future contributions to make up the gap.

In a single-participant plan, this risk is borne entirely by you as both the employer and the sole participant. Most actuaries design single-participant defined benefit plans with conservative return assumptions (4%–5%) to minimize the risk of a contribution shortfall in future years. This conservative approach means plan assets are typically invested in a mix of bonds, stable value funds, and conservative equity allocations.

Combining a Defined Benefit Plan With Other Retirement Accounts

One of the most sophisticated strategies available to high-income small business owners is the “stacking” of a defined benefit plan with a 401(k) profit-sharing plan. This combination creates a retirement contribution machine unlike anything else in the tax code.

The DB + 401(k) Stack

Under IRC Section 415, the annual additions limit for a defined contribution plan (like a 401(k)) is $69,000 in 2024. However, when a defined benefit plan also exists, the 401(k) contributions are treated separately under a different limit. This means a business owner can contribute the full actuarial amount to the defined benefit plan and also make employee elective deferrals ($23,000, or $30,500 with catch-up) to a separate 401(k).

The profit-sharing contribution from the employer side of the 401(k) may be limited based on how much is already going into the defined benefit plan — but the employee deferral portion is almost always fully stackable. This gives a 60-year-old business owner the potential for total annual contributions exceeding $300,000 from a combination of both plans.

Component	2024 Limit	Age 50+ Limit
Defined Benefit Plan	Actuarially determined (up to $275,000+)	Higher — older age increases required contribution
401(k) Employee Deferral	$23,000	$30,500
401(k) Profit Sharing	Limited when combined with DB	Same limitation
Total Combined Potential	$250,000+	$300,000+

Roth Conversion Strategy in Later Years

Once you retire and terminate your defined benefit plan, the accumulated assets can be rolled over to a Traditional IRA and then systematically converted to a Roth IRA during lower-income years. This is a powerful multi-decade tax strategy. You take massive deductions during your high-earning working years, then pay taxes at lower rates during retirement conversion — potentially shifting millions into a tax-free Roth account over time.

This kind of layered planning — combining a defined benefit plan with Roth conversion strategy — is explored in greater depth in our article on Roth IRA vs. Traditional IRA tax decisions in your 50s.

Using a Defined Benefit Plan in Your Business Exit Strategy

For many small business owners, the defined benefit plan isn’t just a retirement savings tool — it’s an integral part of how they exit their business tax-efficiently. Understanding how the plan interacts with a business sale can unlock additional planning opportunities.

Maximizing Pre-Sale Contributions

In the years leading up to a business sale, a defined benefit plan small business strategy becomes especially valuable. By maximizing contributions in the final two to five years before selling, you can dramatically reduce the taxable income from business operations — while simultaneously building a large, tax-sheltered asset base outside the business.

This is particularly relevant for business owners whose company value is tied to earnings. A $500,000 pre-tax contribution to a defined benefit plan reduces net income on paper — but the wealth transfers to a protected retirement account rather than disappearing. The business buyer’s valuation may be unaffected (or even benefit from a cleaner balance sheet), while your personal wealth grows substantially.

Rollover Options at Plan Termination

When you terminate a defined benefit plan — whether at retirement or upon business sale — the accumulated assets roll over to a Traditional IRA with no immediate tax consequence. From there, you control the investment and distribution strategy entirely. Required Minimum Distributions (RMDs) begin at age 73 under current law (SECURE Act 2.0).

Alternatively, some plans allow the purchase of an annuity at termination, converting the lump sum into a guaranteed lifetime income stream. This can complement or reduce your reliance on Social Security benefits — an important consideration when you review your complete retirement income plan. Understanding how these income streams interact is a natural extension of the budgeting strategies retirees on fixed income use to manage cash flow in retirement.

Your Action Plan

1. Assess Your Eligibility in the Next 30 Days

   Review your last two to three years of net business income. If your average annual net income exceeds $150,000 and you have stable earnings, you are a strong candidate. Identify whether you have employees who would need to be covered under the plan — this single factor can significantly change the cost-benefit analysis.

2. Consult a TPA or Cash Balance Plan Specialist

   Not all financial advisors understand defined benefit plans. Seek out a Third-Party Administrator that specializes in cash balance and defined benefit plans for small businesses. Ask them for a free feasibility analysis — most reputable TPAs will run preliminary numbers at no charge. Organizations like the American Society of Pension Professionals and Actuaries (ASPPA) maintain a directory of credentialed professionals.

3. Get an Actuarial Projection

   Request a projection showing your estimated annual contribution range and the resulting retirement accumulation at ages 62, 65, and 67. Compare these projections to what you’d accumulate with a Solo 401(k) alone. Request the tax savings calculation showing combined federal and state tax reduction. This single document will tell you whether the plan makes financial sense for your situation.

4. Choose a Plan Structure and Design

   Decide between a traditional defined benefit plan and a cash balance plan. For most solo practitioners and small business owners, the cash balance plan is preferred — it offers clearer account balance transparency, easier employee communication (if applicable), and simpler benefit distribution at retirement. Your TPA will draft the plan document and select appropriate benefit formulas.

5. Establish the Plan Before December 31

   This is the hard deadline you cannot miss. Unlike a SEP-IRA (which can be established by your tax filing deadline including extensions), a defined benefit plan must be formally adopted by December 31 of the tax year in which you want to claim deductions. Sign the plan document, establish the trust account, and make at least a nominal contribution before year-end to formally activate the plan.

6. Fund the Plan and Set Up Investment Management

   Open a trust account at a custodian (a bank, brokerage, or insurance company) to hold plan assets. Work with your financial advisor to establish an investment policy statement consistent with the plan’s actuarial return assumption. Typically, a mix of intermediate-term bonds, stable value funds, and conservative equity funds is appropriate. Make your annual contribution — which is due by the corporate tax return deadline, including extensions.

7. File Annual IRS and DOL Reports

   Ensure your TPA prepares and files IRS Form 5500 (or Form 5500-EZ for single-participant plans under $250,000) annually by July 31, with an automatic extension to October 15. The enrolled actuary must complete and sign Schedule SB. Missing these filings triggers automatic penalties — set a calendar reminder for June 30 each year to confirm filings are on track.

8. Review and Adjust Annually

   Schedule an annual review with your TPA and actuary each fall — before year-end. If your income has changed, the contribution requirement may need to be recalculated. Use this meeting to project next year’s contribution, confirm investment performance against assumptions, and ensure the plan remains compliant. This is also the time to discuss any upcoming changes to your business — new employees, ownership changes, or planned sale — that could affect the plan.

Frequently Asked Questions

Can a sole proprietor open a defined benefit plan?

Yes. Sole proprietors are fully eligible to establish a defined benefit plan. The plan is sponsored by your business, and you are both the employer and the sole participant. Your net self-employment income (after the self-employment tax deduction) is used to calculate your eligible compensation for contribution purposes.

How does a cash balance plan differ from a traditional defined benefit plan?

Both are legally classified as defined benefit plans and share the same IRS contribution limits. The key difference is how the benefit is expressed. A traditional defined benefit plan promises a specific monthly annuity at retirement. A cash balance plan credits a hypothetical account balance each year — making it easier to understand and administer. For small business owners, cash balance plans are generally preferred because of their portability and transparency.

What is the deadline to establish a defined benefit plan?

A defined benefit plan must be formally adopted — meaning the plan document must be signed — by December 31 of the tax year in which you want to claim deductions. This is a strict deadline with no extensions. The actual contribution, however, can be made by the due date of the business tax return, including extensions (typically October 15 for S-corporations and Schedule C filers).

Can I have a defined benefit plan and a 401(k) at the same time?

Yes, and this is actually the recommended strategy for most high-income business owners. You can maintain a defined benefit (or cash balance) plan simultaneously with a Solo 401(k) or profit-sharing 401(k). The employee elective deferral portion of the 401(k) ($23,000, or $30,500 with catch-up) stacks on top of the defined benefit contribution. The employer profit-sharing contribution may be limited based on the combined plan rules, but your TPA will calculate the allowable amount.

What happens to my defined benefit plan if I want to hire employees?

Adding employees to your business doesn’t automatically require plan termination, but it does create coverage and nondiscrimination testing obligations. You may need to offer eligible employees participation in the plan and fund benefits for them. The cost of covering employees can reduce — or in some cases eliminate — the financial advantage of maintaining the plan. Work with your TPA to model the added cost before hiring.

What if I have a bad year and can’t afford the required contribution?

This is the most significant risk of a defined benefit plan. If you cannot make the required contribution, the plan becomes underfunded. The IRS imposes a 10% excise tax on the funding shortfall, and if not corrected within the year, the tax increases to 30%. Plan termination is an option, but it is complex and time-consuming. This is why stable, predictable income is the most important prerequisite for establishing a defined benefit plan.

How are distributions from a defined benefit plan taxed at retirement?

Distributions from a defined benefit plan are taxed as ordinary income in the year received — the same as a Traditional IRA or 401(k). There are no long-term capital gains rates applicable. Required Minimum Distributions begin at age 73 under current law. If you roll the plan assets to an IRA, the same RMD rules apply. Early withdrawals before age 59½ are subject to a 10% penalty in addition to ordinary income tax, with limited exceptions.

Is my defined benefit plan protected from creditors?

Yes. Assets held in a qualified defined benefit plan receive strong federal protection under ERISA. They are generally shielded from creditors in bankruptcy proceedings and most civil judgments. This makes the defined benefit plan an important component of asset protection planning for business owners in high-liability professions such as medicine, law, and construction. State law also provides additional protections in many jurisdictions, though the specifics vary.

Can I invest my defined benefit plan assets in stocks and mutual funds?

Yes. Plan assets can be invested in a wide range of assets including stocks, bonds, mutual funds, ETFs, and in some cases alternative investments. However, because the plan guarantees a specific benefit regardless of investment performance, most actuaries recommend a conservative investment strategy — typically a mix of intermediate-term bonds, stable value funds, and diversified equity funds. A more aggressive portfolio increases the risk of underfunding if returns disappoint.

What does it cost to set up and maintain a defined benefit plan?

Setup costs are typically $1,500–$3,000 for plan document drafting and initial actuarial work. Ongoing annual administration fees — covering the TPA, enrolled actuary certification, and IRS Form 5500 preparation — typically range from $2,000 to $5,000 per year for a single-participant plan. Investment management fees are separate and depend on the custodian and advisor you select. All of these costs are fully deductible as a business expense.