What Is IRS Form 5498: Information About IRA Contributions?
Form 5498: IRA Contribution Information, which details contributions, required least distributions (RMDs), IRA Roth conversions, rollovers, and the FMV (fair market value) of the IRA account, must be given to you and the IRS if the account is an individual retirement account (IRA).
Since IRA contributions for the prior year are permitted up until mid-April, before tax filing, Form 5498 is published in May. You don’t need to submit the document along with your tax return because it is merely for informational purposes.
KEY LESSONS
The IRS receives notification of IRA contributions, rollovers, conversions to Roth IRAs, and required minimal distributions (RMDs) via Form 5498.
The person in charge of mailing Form 5498 to the IRS and giving you a copy is your IRA trustee or custodian.
Nothing needs to be done to the form itself. Simply store it with your tax documents.
Who Files Information on IRA Contributions on Form 5498?
For the tax year listed on Form 5498, donations made to IRAs are listed (if none were made, there is no entry). Traditional IRAs, Roth IRAs, SEP IRAs, SIMPLE IRAs, which deemed IRAs all require reporting. Deemed IRAs were employee contribution plans that are added to an employer’s qualifying retirement plan and are set up as regular or Roth IRAs.
The IRS and taxpayers get Form 5498 from an IRA trustee or custodian. By June 1 of the year to which the donations correspond, it must be sent. The form should be kept with the taxpayer’s tax records even if it is not required to be included when filing taxes.
Form 5498.
The IRS website has copies of Form 5498 in its entirety.
What’s on the Form 5498: Information on IRA Contributions
1. Type and Ownership of IRAs
The owner of the IRA, the participant, is identified on Form 5498 along with the trustee’s details (name, address, as well as federal identification number). A checkbox in Box 7 of the form serves as a declaration of the IRA type.
Contributions
The amount of all IRA contributions made for the year from all IRA kinds is added, and the result is recorded in Box 1. Then, several contribution categories are separated out specifically: Box 10 for Roth IRAs, Box 8 of SEP IRAs, or Box 9 for SIMPLE IRAs. Deemed IRAs, which might be conventional or Roth IRAs, are handled the same as normal IRAs.
Rollovers, third
Contributions for rollover are shown in Box 2.
For IRAs, there is no financial limit on the number of times a rollover may be made throughout a 12-month period.
A letter from the IRS mentioning the discrepancy is probably going to be sent to a taxpayer who takes a deduction that is higher than the amount listed on Form 5498. Any tax underpayment arising from the deduction exceeding the amount recorded on the form will be requested in the letter, along with any extra taxes, interest, and penalties.
You can make as many trustee-to-trustee transfers as you’d like each year, but Form 5498 does not mention these transfers.
Roth IRA Recharacterizations and Conversions
The maximum yearly contribution to an IRA, especially a Roth IRA, is not capped by the amount transferred to this form of IRA.
You can no more recharacterize transfers to a Roth IRA as of January 1, 2018. But you can reclassify donations made to one kind of IRA (traditional or Roth) as being made to the other kind. Simply tell the trustee of the company that manages your IRA to move your contribution amount and earnings to another kind of IRA, either with the same trustees or a new trustee, to accomplish this.
Contributions that have been recharacterized are submitted in Box 4 on Form 5498 3 9.
5. Information on Withdrawal and Distribution
RMDs are required from the account each year for anyone who is 73 (for those born between 1951 and 1959) or 75 (for those born in 1960 or later).
10 The same is true for spouses who pass away and minor children that inherit an IRA and decide not to convert it into their own account or withdraw the money during a five-year period.
RMDs are calculated for the current year depending on the account’s holder’s age and the account’s fair market value as of December 31 of the previous year. For instance, the RMD for 2024 is based on the account’s worth as of December 31, 2023. On Form 5498, this sum is stated in box 5.
If an RMD must be submitted for the calendar year in which you get the form, it is noted on the form (through Box 11); for instance, the 2019 form indicates whether an RMD is needed for 2020. Additionally, Boxes 12b and 12a of Form 5498 detail the date for the RMD as well as the sum of the RMD that ought to be taken based on calculations performed by the trustee.
The form, which shows the account’s worth as of the prior December 31, must be provided by January 31 (or the next business day) in order to conduct RMDs. For example, the form displaying the account’s worth as of December 31, 2023, must be submitted by January 31, 2024.
Taxable Distributions from IRAs
A Form 1099-R: The distributions From Retirement savings, Annuities, Retired or Profit-Sharing Plans, an IRA, Insurance Contracts, etc. will be sent to you if you withdrew more than $10 from your IRA. You can report the distribution and determine what amount of it is taxable using the information from this form.
