What Is IRS Form 5498: IRA Contribution Information? (2024)

What Is IRS Form 5498: IRA Contribution Information?

IRS Form 5498: IRA Contribution Information is a tax form that reports individual retirement account (IRA) contributions, required minimum distributions (RMDs), Roth IRA conversions, rollovers, and the fair market value (FMV) of IRA accounts. The form is prepared by IRA issuers or trustees and submitted to the account holder and IRS.

Form 5498 should be filed with IRS by May since contributions to an IRA are allowed for the previous year through mid-April, before tax filing. The document is for informational purposes only and the recipient is not required to file it with their tax return.

Key Takeaways

Form 5498 reports IRA contributions, rollovers, Roth IRA conversions, and required minimum distributions to the IRS.
Your IRA trustee or custodian is the one responsible for mailing Form 5498 to the IRS, along with a copy to you.
You don’t have to do anything with the form itself but it should be kept with your tax records.

Who Reports IRA Contribution Information on Form 5498?

Form 5498 lists contributions made to IRAs for the tax year of the form (if no contributions are made, then there is no entry). Reporting applies to the following accounts:

Traditional IRAs
Roth IRAs
SEP IRAs
SIMPLE IRAs
Deemed IRAs

Deemed IRAs are employee contribution plans set up as traditional or Roth IRAs that are tacked on to an employer’s qualified retirement plan.

An IRA trustee or custodian sends Form 5498 to the IRS and taxpayers. It is required to be sent by May 31 following the year to which the contributions relate. Taxpayers don't have to include a copy of the form when they file taxes but should keep it with their tax records.

What Is IRS Form 5498: IRA Contribution Information? (1)

All copies of Form 5498 are available on the IRS website.

What's Included on Form 5498: IRA Contribution Information

1. IRA Ownership and Type

Form 5498 includes information (name, address, and federal identification number) about the trustee and includes the same type of information for the participant, who is the owner of the IRA. The type of IRA is indicated by a checkmark in Box 7 of the form.

2. Contributions

All IRA contributions for the year from all types of IRAs are added together, with the total entered in Box 1. Some types of contributions are then specifically broken out: Box 10 for Roth IRAs, Box 8 for SEP IRAs, and Box 9 for SIMPLE IRAs. Deemed IRAs are treated as regular IRAs and may be traditional or Roth IRAs.

3. Rollovers

Box 2 reports rollover contributions. Only one rollover is permitted within a 12-month period for IRAs, but there is no cap on the dollar amount of the rollover.

A taxpayer who claims a deduction that is greater than the amount reported on Form 5498 likely will receive a letter from the IRS referencing the discrepancy. The letter will ask for additional taxes, interest, and penalties for any tax underpayment resulting from the deduction in excess of the amount reported on the form.

Form 5498 does not report direct transfers, called trustee-to-trustee transfers, and you can make as many of these transfers each year as you want.

4. Roth IRA Conversions and Recharacterizations

Box 3 reports conversions to Roth IRAs. The amount converted to this type of IRA does not limit the amount that can be contributed annually to an IRA, including a Roth IRA.

As of Jan. 1, 2018, you can no longer recharacterize conversions to a Roth IRA. However, you can recharacterize contributions made to one type of IRA (Roth or traditional) as having been made to the other type of IRA.

To do this, simply instruct the trustee of the institution holding your IRA to transfer your contribution amount plus earnings to a different type of IRA, either with the same trustee or a different trustee. Recharacterized contributions are entered in Box 4 of Form 5498.

5. Withdrawal and Distribution Information

Anyone who is 73 years old (for people born between 1951 and 1959) or age 75 (for those born in 1960 or later) must take the required minimum distributions from their account each year. This rule also applies to surviving spouses and minor children who inherit an IRA and elect not to roll it over into an account of their own or withdraw funds on a five-year schedule.

IRA Taxable Distributions

If you took a distribution from your IRA of more than $10, you’ll receive a Form 1099-R: Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRA, Insurance Contracts, etc. Information from this form helps you report the distribution and what portion of it is taxable.

Why Am I Receiving a Form 5498?

That's because you have an individual retirement account (IRA) to save for retirement. The issuer of your IRA or the institution that manages it will send it to you because they are required to report to the IRS all contributions you made to the account during the tax year.

What Is the IRA Contribution Limit?

For 2023, the IRA contribution limits are $6,500 for those under age 50 and $7,500 for those 50 and older. For 2024, the IRA contribution limits increase to $7,000 for those under age 50 and to $8,000 for those age 50 or older.

What Can I Do If Form 5498 Is Wrong?

If the information of a contribution was entered incorrectly by the institution that manages your IRA, it can be corrected for the tax year in question. Keep in mind that you'll have to wait for an amended form. Also, no corrections can be made to a previous tax year.

The Bottom Line

The institution that manages your IRA will send you Form 5498 to report to the IRS any IRA contributions, rollovers, Roth IRA conversions, and required minimum distributions you made during the tax year. If you didn't make any contributions, you won't receive a form. You are required to file it by May 31 following the year to which the contributions were made. Always keep a copy of Form 5498 with your tax records.

As a seasoned financial expert with extensive knowledge in retirement planning and tax-related matters, let's delve into the intricacies of IRS Form 5498: IRA Contribution Information.

IRS Form 5498: IRA Contribution Information Overview: IRS Form 5498 is a critical tax document designed to capture comprehensive information about individual retirement accounts (IRAs). This form is not only a record-keeping tool but serves as a crucial link between IRA holders, IRS, and IRA issuers or trustees. The form encapsulates a range of transactions, including IRA contributions, required minimum distributions (RMDs), Roth IRA conversions, rollovers, and the fair market value (FMV) of IRA accounts.

Key Concepts and Components:

Filing Deadline and Purpose:
- Form 5498 should be filed with the IRS by May, reflecting contributions allowed for the previous tax year through mid-April.
- The document is for informational purposes only, and recipients are not required to file it with their tax return.
Reporting Entities:
- Traditional IRAs
- Roth IRAs
- SEP IRAs
- SIMPLE IRAs
- Deemed IRAs (employee contribution plans linked to an employer's qualified retirement plan)
Form 5498 Contents:
- IRA Ownership and Type (Box 7): Includes trustee information, participant details (IRA owner), and IRA type.
- Contributions (Box 1): Total IRA contributions for the year, with specific breakout for Roth IRAs (Box 10), SEP IRAs (Box 8), and SIMPLE IRAs (Box 9).
- Rollovers (Box 2): Reports rollover contributions, with limitations on the frequency but not the dollar amount.
- Roth IRA Conversions and Recharacterizations (Box 3 and Box 4): Details conversions to Roth IRAs and the ability to recharacterize contributions.
- Withdrawal and Distribution Information (Box 5, 11, 12a, 12b): Contains data on required minimum distributions (RMDs) based on the account holder's age and account value.
RMDs and Timing:
- RMDs apply to individuals aged 73 or 75 (depending on birth year) and are calculated based on the account's value as of December 31 of the prior year.
- Form 5498 must be furnished by January 31, showing the account value as of the previous December 31.
IRA Taxable Distributions:
- Distributions exceeding $10 trigger a Form 1099-R, providing information on taxable portions.
Why Receive Form 5498:
- Individuals with IRAs receive Form 5498 as issuers must report all contributions made during the tax year to the IRS.
IRA Contribution Limits (for context):
- For 2023, the IRA contribution limits are $6,500 for those under 50 and $7,500 for those 50 and older.
- In 2024, limits increase to $7,000 for those under 50 and $8,000 for those 50 or older.
Addressing Errors (for context):
- If Form 5498 contains errors, corrections can be made for the tax year in question, with amended forms issued. No corrections can be made for previous tax years.

Conclusion: In conclusion, IRS Form 5498 is a comprehensive document that encapsulates various IRA transactions. Understanding its components and implications is crucial for individuals managing retirement accounts and for tax compliance. Always retain a copy of Form 5498 with your tax records for future reference and potential audit purposes.