Form 5498: What It Is and How to Use It

Sometimes, IRS Forms can get so specialized and specific that it gets a little overwhelming dealing with them, right? Well, there are a few of them that are refreshing in their simplicity: Enter Form 5498, which is a tool for record-keeping about all of the information regarding your retirement investments in the previous tax year. Don’t go thinking that’s not valuable, either!

El formulario de impuestos 5498 se utiliza para declarar las aportaciones a las cuentas individuales de jubilación (IRA), que incluyen las tradicionales y las Roth, así como el Plan de Ahorro Incentivado para Empleados (SIMPLE) y el Plan de Pensiones Simplificado para Empleados (SEP).

Muchas personas tienen la impresión de que necesitan el formulario de impuestos 5498 para presentar su declaración final. Este formulario es meramente informativo y no debe enviarse a Hacienda junto con la declaración de la renta. La normativa del IRS establece que estos formularios fiscales deben enviarse a los contribuyentes no más tarde del 31 de mayo del año siguiente. Por este motivo, la mayoría de las personas ya han presentado su declaración final.

Even though you do not need to send Tax Form 5498 to the IRS along with your return, it is important that you keep this information for your records. Along with this, you should make sure that your contribution matches the amount in Box 1.

If you believe there is an error, get in touch with your plan administrator as soon as possible. An inaccurate recording could lead to many issues, including lost money and taking the wrong tax deduction.

IRS Tax Form 5498 (Información sobre la contribución a la cuenta IRA)

There is a chance that the contributions on Tax Form 5498 will be different than those found on your quarterly or annual statement. The reason for this is simple: This tax form includes all contributions for the previous tax year, as well as those made through April 15 of the current year. It is important that you are comparing the right numbers when determining if your records match what is included on Tax Form 5498.

El hecho de que el formulario de impuestos 5498 sólo tenga fines informativos no significa que deba ignorarlo. Por el contrario, cuando reciba uno de estos formularios, asegúrese de comprobar la información y archívelo para utilizarlo en el futuro.

Cuentas individuales

En el caso de las cuentas individuales, las ganancias y las aportaciones pueden crecer con impuestos diferidos, pero las distribuciones están totalmente sujetas a impuestos. Si los retiros se realizan después de los 59 años y medio, no están sujetos a penalización. Si tiene una cuenta IRA, debe empezar a retirar dinero antes del 1 de abril del año siguiente a cumplir los 70½ años... también debe pagar impuestos sobre estas distribuciones.

Cuentas Roth IRA

Sin embargo, para las cuentas Roth IRA no hay distribuciones mínimas. También puede retirar dinero libre de impuestos de las cuentas Roth que haya poseído durante al menos cinco años, si tiene al menos 59½ años.

Conversión a una cuenta Roth IRA

Una de las estrategias fiscales más populares de 2010 es la conversión de IRA tradicional a Roth IRA. Se trata de una estrategia fiscal que miles y miles de contribuyentes están aprovechando al máximo. La razón por la que 2010 es el momento de hacer este movimiento es simple: no hay limitaciones de ingresos. Junto con esto, el IRS le permite diferir los impuestos sobre la conversión hasta 2011 y 2012. Esto ayuda a repartir su responsabilidad fiscal, lo que lo convierte en una estrategia fiscal atractiva.

Una de las mejores formas de evitar que sus ganancias por inversiones caigan en manos de Hacienda es realizar inversiones a través de una cuenta de jubilación, como una cuenta IRA. Las aportaciones a estas cuentas suelen ser totalmente deducibles de impuestos, aunque puede haber penalizaciones por retirar fondos antes de alcanzar la edad de jubilación. Antes de realizar una inversión en una cuenta IRA, tenga en cuenta que si usted o su cónyuge tienen también una cuenta 401(k), es posible que sus aportaciones a la cuenta IRA no sean totalmente deducibles de impuestos.

Everything Included on Form 5498

1. IRA Ownership and Type

Form 5498 includes details about both you and the financial institution managing your IRA, such as your name, address, and federal ID number. It also tells the IRS what kind of IRA you have—Traditional, Roth, SEP, or SIMPLE—which is marked in Box 7 of the form.

2. Contributions

All IRA contributions for the year are added up and recorded in Box 1, no matter what type of IRA you have. However, Roth contributions go specifically in Box 10, SEP IRA contributions in Box 8, and SIMPLE IRA contributions in Box 9.

If you have a deemed IRA (which is treated like a regular IRA), it will be classified as either Traditional or Roth.

3. Rollovers

If you rolled over money from another retirement account into your IRA, it gets reported in Box 2. Rollovers are a way to transfer funds between retirement accounts, but keep in mind that you can only do one rollover per year per IRA—though there’s no limit on the amount of money you can roll over.

If you claim a deduction on your tax return that doesn’t match what’s on Form 5498, expect a letter from the IRS asking about the difference. If the IRS finds you underpaid, they might charge additional taxes, interest, and penalties.

4. Roth IRA Conversions and Recharacterizations

If you converted a Traditional IRA to a Roth IRA, that amount will show up in Box 3. The amount you convert doesn’t count toward your annual IRA contribution limit, so you can still contribute separately to an IRA even after a conversion.

Since 2018, recharacterizations (switching a Roth IRA contribution to a Traditional IRA contribution) are no longer allowed. However, you can still convert a Traditional IRA into a Roth IRA.

To convert your traditional IRA to a Roth, just tell your financial institution to transfer the funds (including earnings) to a Roth IRA. If a recharacterization does take place, it’ll show up in Box 4 of Form 5498.

5. Required Minimum Distributions (RMDs)

If you’re 73 or older (born between 1951 and 1959) or 75 or older (born in 1960 or later), you’re required to take minimum withdrawals from your IRA every year. This also applies to inherited IRAs if the beneficiary is a spouse or a minor child who chooses not to roll over the funds or withdraw them within five years.

Your required withdrawal amount is based on your age and the value of your IRA as of December 31 of the previous year. This amount is recorded in Box 5 of Form 5498.

Box 11 on the form indicates whether you need to take an RMD for the current year (for example, a 2023 form will note if you have an RMD due in 2024). The amount you need to withdraw is listed in Box 12b, and the deadline for withdrawing it is in Box 12a.

To help make sure you take your RMD on time, financial institutions are required to send Form 5498 by January 31, showing your account’s value as of December 31 of the previous year.

IRA Taxable Distributions

If you withdrew more than $10 from your IRA, you’ll also receive Form 1099-R, which reports distributions from retirement plans, pensions, and annuities. This form helps you figure out how much of your withdrawal is taxable so you can report it correctly on your tax return.

The Final Word on Form 5498

While some topics and material surrounding federal taxes can sometimes get a little esoteric, Form 5498 has a what-you-see-is-what-you-get quality. It’s an informative document that you can use for accurate record-keeping—no more, no less.

Since it contains information about your IRA contributions, rollovers, Roth conversions and RMDs, it doesn’t have to be filed with your tax return, but don’t just throw it in the bin! Keep it with your other tax records and make sure all the info is accurate. You know, just in case.

About IRS Form 5498: FAQ

1. What is IRS Form 5498 used for?
   Form 5498 reports IRA contributions, rollovers, conversions, and year-end values. It’s mainly for informational purposes and helps both you and the IRS track retirement account activity, so it’s not “used” so much as it’s a method of record-keeping. You do not file it alongside other Forms in your tax return.
2. Do I need to include Form 5498 when I file my taxes?
   Not at all, the Form is not required for filing your tax return. It’s mainly for record-keeping, but you should keep it in case you need to verify contributions or rollovers later. If you’ve read any article on our site, you know we’re the biggest proponents of keeping complete, clear records when dealing with anything IRS-related.
3. Why do I get Form 5498 so late in the year?
   Since you can contribute to an IRA until Tax Day for the previous year, financial institutions need extra time to include all eligible contributions. And, since this is not a Form that you need to file anyway, they can afford the wait. That’s why they send Form 5498 by May 31.
4. What should I do if there’s an error on my Form 5498?
   If you spot a mistake, contact your IRA custodian (bank, brokerage, or financial institution) right away. They can correct the error and issue a revised form. Otherwise, the IRS might catch wind of it as well, but they’ll assume the information is accurate if you say nothing about it, which can create problems down the line.
5. Does Form 5498 affect my tax refund?
   It can, but not directly, and only under specific circumstances. For example, if you made a traditional IRA contribution, you may qualify for a tax deduction, which could lower your taxable income and increase your refund.
6. What happens if I roll over or convert an IRA?
   Form 5498 will show the amount rolled over or converted, but keep in mind that rollovers from a traditional IRA to a Roth IRA (called “Roth conversions”) are taxable events, so be careful about when you choose to do that. Also, make sure you report them correctly on your tax return.
7. Why is there a check in box 11 of my Form 5498?
   That checkbox is there to notify you that you must take an RMD after you reach 70½ years of age. The federal government requires you to take minimum distributions from your account (TIAA-CREF Traditional, Rollover or SEP IRA) if you were 70½ years or older in the previous tax year.
8. Why didn’t I get an IRS Form 5498 this year?
   If you have a traditional IRA, SEP-IRA, Simple IRA, Roth IRA account, but did not have any contributions, rollovers, conversions, or recharacterizations during the previous tax year, you will not get an IRS Form 5498 since there’s no changes to log. The IRS will still receive information about the fair market value of those accounts, however.

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