Understanding IRS Form 5498

Updated on May 22, 2024 - 10:30 AM by Admin, TaxBandits

If you are an IRA provider/issuer, you should be familiar with Form 5498. This form is filed by financial institutions that provide IRAs (Individual Retirement Accounts) to their participants. This article covers everything you need to know about Form 5498 for 2024.

In this article, we will cover the following topics:

1. What is IRs Form 5498: IRA Contribution Information?

IRS Form 5498 is a crucial tax form that provides comprehensive reporting of individual retirement account (IRA) contributions, required minimum distributions (RMDs), Roth IRA conversions, rollovers, and the fair market value (FMV) of IRA accounts. IRA issuers or trustees prepare this essential document, which is submitted to both the account holder and the IRS.

Form 5498 is only for informational purposes. While recipients are not required to file it with their tax return, it offers valuable insights into their retirement savings and financial planning.

2. Who is required to file Form 5498?

Form 5498 needs to be completed and filed to the IRS by the IRA trustees or issuers. IRA trustees can be banks, central banks, credit unions, investment banks, and other IRS-approved financial institutions. Each IRA holder will receive a copy of this return from the financial institution where they have an IRA.

Generally, an IRA combines all contributions and investments under one IRA plan. So you don’t have to file a separate Form 5498 for each investment under one plan. However, if participants have contributed to more than one IRA with the same issuer, a separate Form 5498 must be filed for each IRA plan.

3. What are the different kinds of IRAs?

There are four different types of IRAs, and they are mentioned in the section below:

  • Traditional IRA
  • Roth IRA
  • SEP IRA
  • SIMPLE IRA
  • Traditional IRA

    With a traditional IRA, contributions are tax-deductible. Therefore, the IRA holders don’t have to pay taxes for the contributions made. However, when withdrawing funds, taxes should be paid by participants. Much like ordinary income taxes.

    In addition, when participants reach the age of 72, they should start to withdraw amounts (i.e.) Required Minimum Distribution, from their IRA. Failure to do so may result in a 50% penalty of the Required Minimum Distribution.

  • Roth IRA

    Roth IRAs are accounts where contributions are not tax-deductible, whereas withdrawals are tax-free. Most importantly, there is no Required Minimum Distribution for a Roth IRA.

  • Simplified Employee Pension(SEP) IRS

    The SEP IRA is suitable for independent contractors and small business owners. This IRA follows the same withdrawal rules as the traditional IRA except it does not allow employees to make contributions.

  • Savings Incentive Match PLan for Employees(SIMPLE) IRA

    The SIMPLE IRA is a retirement savings plan for small businesses with 100 or fewer employees. It follows the same withdrawal rules as a traditional IRA and allows both employees and employers to make contributions..

4. What information is reported on Form 5498?

The following information is reported on Form 5498:

  • Trustee’s name and address
  • Trustee’s TIN
  • Participant’s TIN
  • Participant name and address
  • Box 1 - IRA contributions
  • Box 2 - Rollover contributions
  • Box 3 - Roth IRA conversion amount
  • Box 4 - Recharacterized contributions
  • Box 5 - FMV of account
  • Box 6 - Life insurance cost included in box 1
  • Box 7 - Type of IRA (Checkbox)
  • Box 8 - SEP contributions
  • Box 9 - SIMPLE contributions
  • Box 10 - Roth IRA contributions
  • Box 11 - Check if RMD for 2024
  • Box 12a - RMD date
  • Box 12b - RMD amount
  • Box 13a - Postponed/late contrib.
  • Box 13b - Year
  • Box 13c - Code
  • Box 14a - Repayments
  • Box 14b - Code
  • Box 15a - FMV of certain specified assets
  • Box 15b - Code(s)

5. When is the deadline to file the Form 5498?

All of the Form 5498 deadlines for 2021 are listed in the section below.

Form 5498 Deadline
E-filing May 31,2024 File Now
Paper Filing May 31,2024
Recipient Copy: (Only for FMV & RMD) January 31,2024
Recipient Copy: (Other types of IRAs) May 31, 2024

6. Simplify 5498 E-filing and Recipient Copy Distribution with TaxBandits!

TaxBandits is an IRS-authorized e-file service provider supporting various tax forms, including 1099 series, 94x series, and ACA Forms.

Follow these simple steps to e-file Form 5498:

  • Step 1 Create a free TaxBandits account!

  • Step 2 Choose "Form 5498" and the Tax Year.

  • Step 3 Enter the Trustee, Participant, and IRA information

  • Step 4 Review and Transmit to the IRS.

Suppose the trustee or issuer has chosen postal mail or online access services to distribute the recipient copies; TaxBandits will provide the 5498 Form copies to the recipients on behalf of the filer.

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