2020 Form 5498 - Line by Line Instructions

Updated on May 24, 2021 - 10:30 AM by Admin, TaxBandits

To file Form 5498 accurately, you must fully understand the instructions provided by the IRS. This will greatly reduce your risk of errors and reporting incorrect information. In this article we will discuss the 5498 in detail with a focus on common errors.

The following are the topics covered under this:

1. What is Form 5498?

Form 5498 is an information return that must be filed by the issuer or trustee of Individual Retirement Arrangements.

This form should be filed with the IRS on behalf of each participating individual. The IRS requires information such as contributions, rollover, conversion, recharacterization details, Required Minimum Distributions (RMDs), and the Fair Market Value (FMV) of the account to be reported on this form.

2. What information is required to fill out Form 5498?

IRS Form 5498 Instructions for 2020

In Form 5498, you must include basic details, such as the Trustee’s name and address, Trustee’s TIN, participant’s TIN, and participant name and address. You must also include the IRA contribution, rollover, FMV, recharacterized contributions, and FMV, and select the type of IRA using the checkbox.

Each of the details we just listed corresponds to a box on Form 5498. You simply need to fill out the information on the form where it is required to be. Next, we are breaking down the instructions line-by-line.

3. Line by Line Instruction to fill 5498 tax Form

Once you understand what information needs to be entered in each box of 5498, you can fill out this form quickly and accurately. To assist you in the successful completion of Form 5498, we have provided
detailed instructions.

TRUSTEE’S or ISSUER’S name, street address, city or town, state or province, country, and ZIP or foreign postal code - Enter the Trustee’s name and complete address.

TRUSTEE’S or ISSUER’S TIN - Enter the Trustee’s or Issuer’s 9-digit Tax Identification Number (TIN).

PARTICIPANT’S TIN - Enter the Participant’s 9-digit Tax Identification Number (TIN).

Street address (including apt. no.) - Enter the participant’s street address.

City or town, state or province, country, and ZIP or foreign postal code - Enter the participant’s
complete address.

Account number (see instructions) - This is a unique number used to identify the particular return if you’re filing more than one 5498 for a single participant.

  • Box 1 - IRA contributions (other than amounts in boxes 2–4, 8–10, 13a, and 14a)

    Enter contributions to a traditional IRA made in 2020 and through April 15, 2021.

  • Box 2 - Rollover Contributions

    Enter any rollover contributions, these contributions may include any of the following.

    • A 60-day rollover between Roth IRAs or between other types of IRAs.
    • A direct or indirect (within 60 days) rollover from a qualified plan, section 403(b) plan, or governmental section 457(b) plan.
    • As defined in section 408A(e), any qualified rollover contribution from an eligible retirement plan (other than an IRA) to a Roth IRA.
    • A military death gratuity.
    • An SGLI payment.
  • Box 3 - Roth IRA Conversion Amount

    Enter any amounts converted from a traditional IRA, SEP IRA, or SIMPLE IRA to a Roth IRA during 2020. Don’t include any rollover from one Roth IRA to another Roth IRA.

  • Box 4 - Recharacterized Contributions

    Enter recharacterized amounts and earnings from one type of IRA to another, if any.

  • Box 5 - Fair Market Value of Account

    Enter the Fair Market Value (FMV) of the account on February 1, 2021.

  • Box 6 - Life Insurance Cost Included in Box 1

    This box only applies to endowment contracts. Enter the amount included in box 1 allocable to the cost of life insurance.

  • Box 7 - Checkboxes

    Check the box that applies.

    IRA - Check the IRA box if you’re filing Form 5498 to report traditional IRA information

    SEP - Check the SEP box if you’re filing Form 5498 to report SEP IRA information. If you’re unsure whether the account is a SEP IRA, check the “IRA” box.

    SIMPLE - Check the SIMPLE box if you’re filing Form 5498 to report SIMPLE IRA information. You should not file Form 5498 for a SIMPLE 401(k) plan.

    Roth IRA - Check the Roth IRA box if you’re filing Form 5498 to report Roth IRA information.

  • Box 8 - SEP Contributions

    Enter employer contributions made to a SEP IRA during 2020. This should include salary deferrals under a SARSEP. Make sure you include only contributions made in 2020 for 2021.

  • Box 9 - SIMPLE Contributions

    Enter employer contributions, including salary deferrals, made to a SIMPLE IRA during 2020. Make sure you include only contributions made in 2020 for 2021.

  • Box 10 - Roth IRA Contributions

    Enter contributions made to a Roth IRA in 2020 and through April 15, 2021, designated for 2020,
    if any.

  • Box 11 - Check if RMD for 2021

    Check the box if this participant must take an RMD for 2020.

  • Box 12a - RMD Date

    Enter the RMD date by which the RMD Amount in Box 12b must be distributed.

  • Box 12b - RMD Amount

    Enter the RMD amount if you’re filing Form 5498 to report additional information for 2021.

  • Box 13a - Postponed/late Contrib.

    Enter the amount of a late rollover contribution (60 days after distribution) or postponed contribution made in 2020.

  • Box 13b - Year

    Enter the year for which the postponed contribution in box 13a was made.

  • Box 13c - Code

    Enter the reason for the postponed contribution referenced in box 13a.

  • Box 14a - Repayments

    Enter the amount related to any repayment of a qualified reservist distribution, a qualified disaster distribution, or a qualified birth or adoption distribution.

  • Box 14b - Code

    Enter “QR” or “DD” or “BA” based on the repayment. For example, enter “QR” for the repayment of a qualified reservist distribution. Enter “DD” for repayment of a qualified disaster distribution. Enter “BA” for repayment of a qualified birth or adoption distribution.

  • Box 15a - FMV of Certain Specified Assets

    Enter the Fair Market Value (FMV) of the investments in the IRA.

  • Box 15b - Code(s)

    Enter the codes based on the value entered in box 15a. The following are codes that can be entered in this box. You’re allowed to enter a maximum of 2 codes. If more than two codes are applicable, enter Code H.

    • A - Stock or other ownership interest in a corporation that is not readily tradable on an established securities market.
    • B - Short- or long-term debt obligation that is not traded on an established securities market.
    • C - Ownership interest in a limited liability company or similar entity (unless the interest is traded on an established securities market).
    • D - Real estate.
    • E - Ownership interest in a partnership, trust, or similar entity (unless the interest is traded on an established securities market).
    • F - Option contract or similar product that is not offered for trade on an established option exchange.
    • G - Other asset that does not have a readily available FMV.
    • H - More than two types of assets (listed in A through G) are held in this IRA. You’re allowed to enter a maximum of 2 codes. If more than two codes are applicable, enter Code H.

4. What is the deadline for filing 5498?

For 2020, the deadline to file form 5498 with the IRS is June 30, 2021. In the section below, we have listed all deadlines associated with 5498.

Form 5498 Deadline
E-filing June 30, 2021 File Now
Paper Filing June 30, 2021
Recipient Copy: (Only for FMV & RMD) Feb 01, 2021
Recipient Copy: (Other types of IRAs) June 30, 2021

5. How to E-File Form 5498?

The IRS recommends you file Form 5498 online for quicker processing. TaxBandits, an IRS-authorized e-file provider, is here to help you with the e-filing of Form 5498.

Steps to e-file Form 5498 using TaxBandits

  • Sign in to TaxBandits.

  • Click Start New Form >> Form 5498.

  • Select Tax Year.

  • Enter the Contribution information.

  • Pay & transmit your return to the IRS.

E-file your Form 5498 before the deadline using TaxBandits!

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