What Is Tax Form 5498?

January 9, 2017
What Is Tax Form 5498?

If you have an individual retirement account (IRA), you should receive a Form 5498 from the custodian of your retirement plan. The custodian is the financial institution that manages your IRA. It will also send a copy of the form to the Internal Revenue Service (IRS).

Your copy of the form is for your information only. You don't need to file it with your tax return. However, you should be familiar with the purpose of the form. You will also need to reference the form's information if you claim a deduction on your tax return for your IRA contributions. HR professionals should also be familiar enough with the purpose of this IRS form to answer general questions from employees.

Health savings accounts (HSAs) are becoming increasingly popular. Approximately 1/4 of workers in the U.S. are enrolled in plans that are HSA-eligible. (1) If you made contributions to a health savings account or a medical savings account (MSA) for the prior tax year, you may also receive a related form, Form 5498-SA, which reports those contributions.

This article will provide an overview of Forms 5498 and 5498-SA and discuss common mistakes to avoid with the forms.

What is IRS Form 5498?

The title of IRS Form 5498 is "IRA Contribution Information." It provides information on your IRA contributions and other information about your plan. The custodian of your account fills it out and sends a copy to you and a copy to the IRS. The custodian (also known as the trustee or issuer) must send the form by May 31 of each year to report contributions that apply to the previous tax year.

You should receive Form 5498 if you have a Roth IRA, traditional IRA, SEP IRA, SIMPLE IRA, or deemed IRA.

The form is for your information only. You don't need to — and, in fact, shouldn't — file the form with your tax return. Just check to make sure the information is correct and keep it with your tax records.

In addition to Form 5498, there are two related forms: Form 5498-ESA for Coverdell education savings account (ESA) plan contributions and Form 5498-SA for health savings accounts (HSA) or medical savings accounts (MSA).

What does Form 5498 cover?

Information that Form 5498 covers includes IRA account contributions that apply to the prior tax year, such as:

  • Contributions made during the previous calendar year and contributions made through April 15 of the following year (the current year).
  • Any excess contribution.
  • Rollovers and conversions.
  • Required minimum distributions.
  • Fair market value of the account at year-end.
  • Type of IRA.

What is Form 5498-SA?

IRS Form 5498-SA reports contributions to health savings accounts. It is also used to report contributions to medical savings accounts. These may include Archer medical savings accounts or Medicare Advantage medical savings accounts. Like Form 5498, this form is sent by the trustee or custodian of the account, who also sends a copy to the IRS. Also like Form 5498, this form is for your information only. You should check that the information on the form is correct and save it with your tax records. Don't submit it with your tax return.

Information on Form 5498-SA includes:

  • Contributions made for the prior tax year.
  • Rollover contributions.
  • Fair market value of the HSA or MSA account.
  • Type of account.

Common mistakes to avoid when dealing with Form 5498

Make sure that you don't file your Form 5498 or Form 5498-SA with your return.

Also, you should check the forms to ensure that the trustee who filled out the form did not make any of these common errors:

  • Issuing duplicate forms.
  • Reporting your contributions for the wrong year.
  • Failing to correctly report a conversion from a traditional to a Roth IRA.
  • Missing or wrong information on the required minimum distribution.

This overview of Form 5498 and Form 5498-SA should give you the basic information you need to be prepared when you receive the form in the mail. Remember that you don't file either form with your tax return and that you should check to make sure that the issuer did not make any mistakes.

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