The 5498 form is a form that financial institutions must submit to the Internal Revenue Service (IRS) for each client who has an Individual Retirement Account (IRA). It is known as the “IRA Contribution Information Form” and outlines the tax-deductible contributions made to your IRA during the tax year.
How does the 5498 form work?
The 5498 form is an informational form that reports your IRA contributions to the IRS, as well as any rollovers you may have made. The form also reports:
- Recharacterization of contributions
- Rollovers
- Fair market values at year-end
The form includes both deductible and nondeductible contributions.
Who uses the 5498 form?
Financial institutions managing IRA accounts for clients use the 5498 form to report contributions to the IRS. You will also receive a copy if you contributed to an IRA during the previous tax year.
The 5498 form can help you determine the tax deduction for qualified contributions you made to your IRA, but it is not necessary to deduct the full amount listed for contributions in a traditional IRA.
The IRS sets contribution limits for IRAs. The limit for 2022 is $6,000 if you are under age 50, or $7,000 if you are age 50 or older. For 2023, the limits are $6,500 and $7,500, respectively.
Types of the 5498 form
There are three types of the 5498 form:
- Form 5498: Reports contributions to IRAs, including those made to SEP-IRAs, Roth IRAs, inherited IRAs, and SIMPLE IRAs.
- Form 5498-ESA: Reports contributions to Coverdell ESA accounts, which are a type of custodial account created to pay for education costs for the beneficiary.
- Form 5498-SA: Used for Health Savings Accounts (HSA), which allow you to save pre-tax dollars for qualified medical expenses. It is also used for Archer medical savings accounts (MSA) and Medicare MSAs.
What to do if you did not receive the 5498 form?
Contact your IRA account administrator if you did not receive the 5498 form reporting your contributions.
You have until Tax Day – usually around April 15 each year – to make contributions to your IRA for the previous tax year. The account administrator has until May 31 to issue the form.
If you did not receive the 5498 form in a timely manner, ensure that your IRA account administrator has your correct address. Also, check whether you actually contributed to an IRA in that tax year.
How to read the 5498 form
Different boxes on the 5498 form report contributions to various types of plans and a variety of other information.
If you are trying to read your 5498 form, here’s what you can find in each section:
- Box 1: Contributions to traditional IRAs made during the last tax year and up to Tax Day in the current year.
- Boxes 2 and 3: Transfers and rollovers from another plan to the IRA.
- Box 7: Indicates your plan type.
- Box 8: Contributions to SEP-IRAs for the year they were received, including employee contributions.
- Box 9: Contributions to SIMPLE IRAs for the year they were received, including employee contributions.
- Box 10: Contributions to Roth IRAs made during the last tax year and up to Tax Day in the current year.
- Box 11: Indicates whether you are required to begin taking required minimum distributions (RMDs).
- Box 15a: Fair market value.
Direct transfers between the same types of plans are typically not reported on the 5498 form.
Double-check your tax return to ensure you haven’t claimed a deduction for more than what is reported on the 5498 form. Contact your plan administrator if you believe the figures on the form may be incorrect. You can also check with a tax professional for assistance in resolving any issues.
Requirements
Filing Form 5498
Typically, institutions and financial organizations are required to file Form 5498 with the IRS by May 31 of the current tax year. The deadline is January 31 for fair market value and required minimum distributions, and April 30 for Form 5498-ESA.
You must specify the year for which you wish to have your contributions counted at the time you make the contributions.
This information may seem contradictory. After all, personal tax returns are traditionally due by April 15, but you typically have until tax day to make IRA and other retirement account contributions for the previous tax year that ended on December 31. Your plan administrator needs a bit more time to include these contributions.
Frequently Asked Questions (FAQs)
What do you do if you receive Form 5498?
You do not need to file Form 5498 with your tax return. It is an information statement that should match what you report on your tax return regarding your IRA contributions for the tax year. If you receive Form 5498, you can keep it in case you need to verify what you reported on your tax return.
How do you enter the information from Form 5498 into your tax return?
You are likely to receive Form 5498 after tax day because it must be sent by May 31, and tax day is in April. Therefore, do not take the information from Form 5498 and enter it into your tax return. You should have already reported the amount you contributed to your IRA for the tax year you are filing on your tax return. Form 5498 should match what you reported on your tax return.
Source: https://www.thebalancemoney.com/irs-tax-form-5498-3193215
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