An Explanation of IRS Form 5498
If you have an IRA or another type of tax-preferred savings account, you'll most likely receive a copy of Form 5498 from the financial institution sometime after the first of the year. The Internal Revenue Service also received a copy. Among other things, Form 5498 tells the IRS how much you contributed to your IRA during the tax year.
The Information That's Reported
Form 5498 reports various types of account information, including:
- Contributions made to IRAs, HSAs and ESA plans
- The fair market value of IRAs or other accounts as of Dec. 31
- Whether the account holder must begin taking required minimum distributions
You should receive a Form 5498 for each type of account you have – traditional IRA, Roth IRA, SEP IRA and others – at each financial institution. If you have a SEP IRA and a Roth IRA at the same bank, that bank will issue you one Form 5498 for each account, but financial institutions will group all accounts of the same type into one Form 5498. For example, all Roth IRAs at a particular bank will be reported on one form.
Three Kinds of Forms 5498
Forms 5498 come in three forms, depending on what they're reporting.
- Form 5498, IRA Contribution Information reports information about individual retirement accounts such as traditional IRAs, Roth IRAs, SEP IRAs and SIMPLE IRA plans.
- Form 5498-SA reports information about health savings accounts (HSAs).
- Form 5498-ESA reports information about Coverdell Education Savings Accounts.
When You Will You Receive Form 5498
Form 5498 is sent out by Jan. 31 to IRA account holders who must take required minimum distributions. Box 11 will be checked if you'll reach age 70 1/2 during the current year. This box serves as a reminder that you should begin taking RMDs no later than April 1 of the year following the one in which you turn 70 1/2. Otherwise, if you do not have to begin taking RMDs, the institution has until May 31 to send you your form.
Form 5498 must also be filed with the IRS by May 31. Contributions for the previous tax year made up until April 15 are included on Form 5498 for traditional and Roth IRA accounts, so many IRA account holders receive won't receive this information until May, but you should certainly have it in your own records.
The Need to Include This Information on Your Tax Return
You've most likely already included any information found on Form 5498 on your tax return. Most people who have already filed their tax returns by the end of May won't have to revise or amend their returns. Form 5498 serves mostly as confirmation of the information you've already provided to the IRS. Even so, it's a good idea to make sure that information reported on the form matches up with your records and your tax return.
How to Crosscheck the Information
Contribution amounts for IRAs reflect all contributions made through the IRA funding deadline, usually April 15 for a particular tax year. Contribution amounts for SEP and SIMPLE plans reflect all contributions made during the calendar year regardless of the tax year designated by the contributor. Form 5498 reflects all contributions made, even if some or all of them were withdrawn.
- Contributions to a traditional IRA are reported in box 1 of Form 5498. Deductible traditional IRA contributions are reported on Form 1040, line 32. Nondeductible traditional IRA contributions are reported on Form 8606, line 1. The amount shown in box 1 of Form 5498 includes all contributions made to a Traditional IRA that were designated as being for the previous tax year.
- Contributions to a Roth IRA are not reported on your tax return. Nonetheless, the amount shown in box 10 of Form 5498 reflects all contributions you made to a Roth IRA that were designated as being for the previous tax year.
- If you're self-employed, contributions to SEP and SIMPLE IRAs are reported on Form 1040, line 28. SEP and SIMPLE IRA contributions made by an employer to an employee's account don't show up on the employee's 1040, but they should appear in box 12 on your W-2 along with a code. Code F indicates a SEP IRA, and Code S is for SIMPLE IRAs. SEP and SIMPLE contributions reflect funds actually contributed during the calendar year instead of the designated tax year the way traditional and Roth IRA contributions are.
- Rollover contributions appear in box 2 of Form 5498. They should match up with any Forms 1099-R you received showing direct rollovers, plus any indirect rollovers you made.
- Roth IRA conversions appear in box 4 of Form 5498. These should also match up with any Forms 1099-R you received showing Roth IRA conversions, and they should match what appears on your Form 8606 in lines 8, 16 or 21.
- You'll find health savings account contributions in box 2 of Form 5498-SA. These reflect total contributions for the previous tax year, both those you made and any of your employer's contributions. Your employer's contributions are also reported in box 12 of Form W-2 under code W. Individual contributions should match up with the amount shown on line 25 of your 1040.