What Is Tax Form 5498?

As life gets more complex, so do our taxes. New tax forms might appear in the mail each year, such as Tax Form 5498. When you receive a Tax Form 5498 for the first time, it might be confusing. Any unfamiliar tax document coming from the IRS or your employer can feel overwhelming. Whether this is the first time you’ve received Form 5498 or you’ve received them for years, certified tax professionals from Community Tax can help you understand your tax forms and file your taxes to make your life easier.

Three Types of Tax Forms 5498:

  • Form 5498, IRA Contribution Information

This is a general report that records information about individual retirement accounts, including traditional IRAs, Roth IRAs, SIMPLE IRAs, SEP IRAs, and deemed IRAs.

  • Form 5498-SA

If you have a health savings account, you’re subject to Form 5498-SA. This includes Archer Medical Savings Account (Archer MSA), Health Savings Account (HSA), and Medicare Advantage MSA (MA MSA). This form reports your annual contributions to these accounts, and the form must be sent to contributors and the IRS by May 31.

  • Form 5498-ESA

You’ll receive this form if you have Coverdell Education Savings Accounts. This account is used as a long-term investment to raise money for a child’s education.

What Is the IRA Contribution Tax Form?

The IRA Contribution Tax Form, or Tax Form 5498, is an official document containing information about your IRA contributions. The trustee or custodian of your IRA reports any catch-up contributions, required minimum distributions, and the fair market value of your account. Your custodian, whether it be your employer or an institution, must send both you and the IRA a copy of Tax Form 5498. There are three types of Tax Forms 5493, including:

  • Form 5498, IRA Contribution Information

This report contains information regarding individual retirement accounts like traditional IRAs, SIMPLE IRAs Roth IRAs, SEP IRAs, and deemed IRAs.

Form 5498-SA

You’ll receive this form if you have a health savings account, or HSA. Qualifying accounts include Archer Medical Savings Account (Archer MSA), Health Savings Account (HSA), and Medicare Advantage MSA (MA MSA). This form is sent out by May 31.

  • Form 548-ESA

If you have a Coverdell Education Savings Account, you’ll receive this form. This account is a long-term investment used to fund a child’s education.

What Information Is Included in an IRA Contribution Tax Form?

A Tax Form 5498 shows all of the information regarding your retirement investments in the previous tax year. This information is valuable for your records, and like all tax documents, it’s recommended that you keep a copy for at least three years. You’ll find important information regarding your accounts, including:

  • Traditional IRA Contributions

Box 1 shows the summation of all traditional IRA contributions, except for repayments, rollover contributions, Roth IRA contributions and conversions, SEP contributions, and SIMPLE conversions. The amount shown in Box 1 may be deductible on Form 1040 or Form 1040A.

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  • Rollover Contributions

Rollover, qualified rollover, and any late rollover contributions. This includes any rollovers from a traditional IRA, SIMPLE IRA, or SEP IRA to a Roth IRA.

  • Other Conversions

This displays the total converted from a SIMPLE IRA, SEP IRA, or traditional IRA to a Roth IRA.

  • Recharacterized Contributions

Any recharacterized amounts from transferring any part of the contribution and earnings from one IRA to another are shown here.

  • Fair Market Value

The current price that your asset could fetch in the market place is your fair market value, or FMV.

  • Postponed Contributions

Your Form 5498 will display the year of any postponed contributions.

  • Roth IRA Contributions and Conversions

Roth IRA contributions are not deducted on your income tax return.

  • SEP and SIMPLE IRA Contributions

Your employer may prevent you from deducting your SEP IRA and SIMPLE IRA contributions. If you’re self-employed, you may be able to deduct them on your tax return.

  • RMD Amount

You may be required to take a Required Minimum Distribution, or RMD, for the current year. If you choose not to take the RMD, you are subject to a 50% excise tax on the amount not distributed.

 

Do I Need This Information to File My Tax Return?

You’ve probably already included the necessary information on your tax return if you filed by April 15. Your custodian sent you and the IRS a copy of Form 5498 to confirm the information between all three parties. Your Form 5498 generally won’t affect your tax return.

When you receive a Form 5498, keep it in your personal records. Each tax season, compare your current Form 5498 with your records to ensure it contains accurate, up-to-date information. If any of the information is inaccurate, contact your custodian to correct the mistake.

When a mistake on a Form 5498 goes unnoticed, the IRS might send a letter requesting back taxes, interest, or other penalties accrued. If the IRS sends you a letter, contact Community Tax, and our team of certified tax experts will resolve any discrepancies and correct any misinformation.

 

 

 

 

 

Do I Have to Include This Information on My Tax Return?

Whether or not you receive a Form 5498 before you file your taxes typically won’t affect your tax return. The purpose of Tax Form 5498 is to confirm your IRA information with both the IRS and the custodian of your account. If you filed your taxes by April 15, you probably already reported your contribution.

When you receive Form 5498 in the mail, compare the information with your tax return and personal records to confirm that it’s correct. If it’s inaccurate, contact your institution and make a request to the IRS to amend your return and correct any mistakes.

If you receive a letter from the IRS that states a discrepancy between your claim and their information, you might be asked for additional taxes, interest, and penalties. Contact our tax experts if you’ve received a notice from the IRS and we’ll help you correct mistakes and strategize a way to pay off your debt.

Why Did I Receive a Tax Form 5498?

If you contribute to an Individual Retirement Account, or IRA, you should receive Tax Form 5498, IRA Contribution Information each year you contribute. The bank or custodian who manages your IRA will issue this form to you and the IRS to report your IRA contributions. Your form should contain information regarding IRA contributions, Roth IRA conversions, rollovers, and required minimum distributions.

When Will I Receive Form 5498?

If you’re required to make a minimum distribution to your IRA, your account holder must send you a copy of Form 5498 by January 31. If you don’t have a required minimum distribution, or RMD, the institution doesn’t have to send out your form until May 31.

 

What Information Is Reported?

Form 5498 contains valuable information about your retirement investments:

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The information listed above is divided into individual boxes on your form. Like all tax forms, it’s wise to keep a copy in your records for at least three years. If you need a copy at any time, your account custodian should have a digital copy they can send to you online or through the mail.

Should I Hire a Tax Professional?

Taxes only get more complicated as the years go by. Changing tax codes, acquisition of assets, addition of dependents, change in marital status, and more can drastically affect your tax return. Whenever you go through a life change that could affect your finances, you should hire a professional to avoid pitfalls and file an accurate tax return. Whether you’ve just opened an IRA for the first time, or you’ve contributed to the same account for years, our tax advocates can help keep your finances secure so you can make the most out of your retirement.

Our team of certified tax professionals have decades of experience in tax preparation. When you receive a Form 5498, turn to us for guidance on how you can best develop your retirement investment and maximize your tax return at the same time. We care about the success of our clients, so we tailor our services to suit your financial goals. Contact us, and we’ll pair you with one of our tax experts today.

Taxpayers Prefer Community Tax

It’s our mission to create a new standard in the tax preparation industry in which the client’s best interests come first. We don’t charge frivolous upfront fees and hidden costs. Our corporate philosophy states that no client should pay full price for a service until they know what their options are and what we can provide for them.

Community Tax has successfully helped over 44,000 clients solve their tax problems with over $250 million in tax debt resolved. We are a Department of Consumer Affairs accredited business with an “A+” rating by the Better Business Bureau. The IRS has also deemed us an Approved Continuing Education Provider, along with recognition from the National Association of Tax Resolution Companies.

Whether you need to file back taxes or lift a wage garnishment, our tax advocates can help you out of any tax situation.

Tax Preparation Services

We don’t provide a wide array of tax services for our clients. Whether you need to resolve a discrepancy with your Tax Form 5498, or you need to lift a wage garnishment with the IRS, our dedicated team will create a solution to suit your needs. From individuals to large businesses, we’ve helped resolve over $250 million in tax debt for over 44,000 clients. If you’re ready to take your finances back into your control, consider these services:

  • Custom Tax Solutions
  • Income Tax Preparation
  • IRS Audit Defense
  • IRS Debt Settlement
  • Negotiate Payroll Taxes
  • Offer in Compromise
  • Prevent Levy and Seizure
  • Stop Wage Garnishment
  • Tax Extensions
  • Tax Lien Help
  • Tax Penalties and Interest
  • Tax Resolutions

Pick from one or several of our tax preparation services to get what you need. Our team will devise a unique strategy so you can create a positive financial future. Contact us today and our professionals will conduct a free consultation to give you honest feedback about your options.

When Should I Hire a Tax Advocate?

Hiring a tax advocate can help you save more money in the long term. Whether you’re in dire financial straits or you want to build a foundation for your future, a tax preparer from Community Tax can help make your dreams a reality. Taxes become complicated as we get older. Whether you invest in an IRA, change your marital status, gain dependents, acquire loans, or attain more assets, a tax professional from Community Tax can help make the most out of your tax situation. Let our experts organize and file your taxes on time and take the burden off your hands.

 

Why Taxpayers Choose Community Tax

Community Tax is the preferred source for taxpayers who want to take control of their finances. Our team is dedicated to finding effective solutions to taxpayer issues by providing top-notch services to our clients. The Better Business Bureau awarded us with an “A+” rating, and the IRS has named us an Approved Continuing Education Provider. We’re also a verified member of the National Association of Tax Resolution Companies and we’re accredited by the Department of Consumer Affairs. From bookkeeping services to tax resolution, our tax advocates have helped thousands of clients save millions of dollars every year. If you’re ready to take back your finances, contact us at 999.676.4319 for a free consultation.