A property tax bill paid from a personal account is a $2,180 lesson on IRA expense rules

Consider a self-directed IRA that owns a small rental. The tax bill arrives addressed to the custodian, gets forwarded to the account holder as custodians often do, and gets paid online from a personal account rather than through the IRA's own payment authorization process, because it was faster in the moment. A water heater repair invoice a month later gets paid the same way, since by then it had become the habit. The rule itself is usually well known going in. What trips people up is not connecting a routine bill payment to the phrase "all expenses must be paid from the IRA," because paying a bill for the house does not feel like a transaction with the house. It tends to surface when a year-end statement shows no tax payment out of the account and someone goes looking for where the money went. The cost of fixing something like this runs real money: a CPA who handles these situations, an attorney for a written analysis, and weeks of stress on top of that. On a modest underlying mistake, the fix can easily cost more than the mistake itself. Where these cases usually land, and this is worth hearing early rather than late: the outcome depends entirely on facts a professional has to assess, not something to self-diagnose from a forum post. A prohibited payment sometimes gets treated as a contribution rather than the worse outcome, particularly if the account holder was under their contribution limit for the year, but different facts and different amounts change the analysis completely. The practical fix is prevention. Keep the custodian's expense payment form somewhere immediately accessible, and have bills mailed to the custodian directly with no forwarding at all. An invoice never seen is an invoice that can't be paid personally by mistake.