IRS Form 5498 ESA: Understanding the Form

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

The IRS Form 5498 Series is a complex group of forms to understand. They all deal with different kinds of accounts that are offered by trustees and often financial institutions. The Form 5498 ESA is geared towards a specific type of educational account that is set up for a beneficiary to pay their educational expenses. Here is a breakdown of the Form 5498 ESA.

Below are the topics covered in this:

1. What is Form 5498 ESA?

The Form 5498 ESA exists specifically to report information about Coverdell Education Savings Accounts (ESA). This is a specific type of educational savings account that is set up to help fund the educational expenses of the plan’s beneficiary. This is an account that is handled by a custodian or trustee. When the account is set up, it must be set up initially as a Coverdell Education Savings Account, otherwise the IRS will not treat it as such.

2. Who is required to file Form ESA?

The 5498 ESA tax Form must be filed by the custodian or trustee of the account. This is the entity that issued the account and oversees the account over the years. This form has two copies, Copy A must be sent to the IRS and Copy B must be distributed to the beneficiary.

3. What information is reported on Form
5498 ESA?

Trustees of the Coverdell Education Savings Account must report the total amount of contributions made to the account throughout the tax year 2020.

The trustee must also report any transfers of the account, for example a transfer from the trustee to another trustee during the year must be reported on Form 5498 ESA. Rollovers must also be reported.

4. When is the deadline to file 5498 ESA?

The deadline to file Form 5498-ESA with the IRS is June 30, 2021. This is also the deadline to distribute form copies to all beneficiaries.

5. How do I complete and file Form
5498 ESA?

The 5498 ESA requires you to fill out the beneficiary information and trustee information. There are then two lines that must be completed. This includes both the trustee’s name, address, and TIN. The legal name, address, account number, and TIN of the beneficiary must also be entered on the form. In box one, the total Coverdell ESA contributions should be entered.

When it comes to the options for submitting this form to the IRS, there are two options. This form can be filled out and then mailed to the IRS, or it can be filed electronically. E-filing in the IRS preferred method. This allows for quicker processing and increased accuracy on the form itself.

If you are seeking a simple solution to e-filing your IRS Form 5498 ESA, check out TaxBandits

Steps to file Form 5498 ESA online with TaxBandits

  • Sign in to TaxBandits account.

  • Select the “Form 5498 ESA”.

  • Enter the Trustee details.

  • Enter the Beneficiary details.

  • Enter the Coverdell ESA and rollover contributions.

  • Review, pay and transmit to the IRS.

We support both e-filing with the IRS and postal mailing options for recipient copies. You even have the option to allow your beneficiaries online access to view and download their Form 5498 ESA. TaxBandits enables you to e-file 5498 easily and accurately.

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