Do I Need to File an IRA Tax Form 5498?

The Internal Revenue Service, which regulates the operation of tax-advantaged retirement accounts, requires issuers and trustees of individual retirement accounts to submit annual reports of contributions, distributions and other financial activity in the accounts. An account holder of an individual retirement account receives IRS Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. Plan issuers or trustees submit Form 5498, IRA Contributions Information, annually to the Internal Revenue Service.

Individual Retirement Accounts

The IRS allows individuals to save money in retirement accounts established at financial institutions. Employers offer the IRA for employees to save for retirement and take the account with them when they leave. The funds in IRAs are invested. Contributions, earnings and gains are tax-deferred, but participants pay taxes on distributions from IRAs. IRA funds rolled over into other tax-advantaged retirement accounts are not taxed. Because the IRA has significant advantages for account holders, the IRS enforces reporting requirements and strict rules for eligibility, contributions and distributions from the accounts.

Form 5498 Submission

The issuer or trustee of the IRA plan completes a Form 5498 for each individual account it manages. The trustee or issuer submits Copy A of Form 5498 to the Internal Revenue Service. Copy B is provided to the plan participant and Copy C is for the issuer or trustee. The IRS requires submission of the form by the published due dates. For instance, with submissions for the 2012 tax year, the IRS set a deadline of May 31, 2013, to provide Copy A to the IRS and Copy B to participants. However, the IRS set a date of Dec. 31, 2013, for issuers and trustees to report information about the fair market value of the plan and required minimum distributions.

Information Reported

Dates and amounts of financial activity for an IRA are reported on Form 5498. Contributions to the IRA, including the catch-up contributions allowed for account-holders age 59 and older, are reported on Form 5498. Also reported on the form are required minimum distributions that account holders are required to take at certain points in the life of the IRA. Form 5498 also includes the fair market value of investments in the IRA account. The form includes rollover amounts.

Participant Reporting Requirements

While the IRS does not require IRA participants to submit Form 5498, the agency does require participants to report the IRA information on their annual U.S. Individual Tax Return forms, either Form 1040 or Form 1040A. Taxpayers calculate and pay any taxes due on distributions, converted amounts, payments or other activity in IRAs. Some taxpayers use the 5498 information to take a deduction for IRA contributions.

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About the Author

Gail Sessoms, a grant writer and nonprofit consultant, writes about nonprofit, small business and personal finance issues. She volunteers as a court-appointed child advocate, has a background in social services and writes about issues important to families. Sessoms holds a Bachelor of Arts degree in liberal studies.

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