If you have a Roth IRA, you might be wondering what to do with the 5498 Roth IRA tax form. The good news is that it’s easy if you know what to expect. Do you have questions about that tax form that came in the mail? Don’t worry, we’ve got all the answers right here. Here is what you need to know about the Roth IRA 5498 tax form. 

What is IRS Form 5498: IRA Contribution Information

IRS Form 5498: IRA Contribution Information is the document you need to submit to the IRS in order to claim a tax deduction for an IRA contribution. It is also the document you use to report any distributions (withdrawals) you make from your IRA. If you have a Roth IRA, you will receive this form from the financial institution that holds your account.

The form includes information about your retirement plan, such as its name and address, as well as your name and Social Security number. It also includes information about the year you made your contribution, such as how much it was for, when it was deposited into your account and how much interest accrued on it during that time period. You will also see a section where you can enter any distributions or withdrawals that occurred during that year.

Why Should You File This Form?

The IRS requires that all taxpayers who participate in a Roth IRA file Form 5498 with their tax return each year. Failure to do so could result in penalties or other consequences. In addition, if you’re considering withdrawing money from your account before reaching retirement age, you will need this form as proof that you have contributed funds into the account during the current tax year (or previous years).

Purpose of the Form

The purpose of the 5498 tax form is to report your Roth IRA contributions and earnings, as well as any distributions you have made. If you are a first-time investor or just getting started with a Roth IRA, this form is pretty straightforward.

You will report your annual contributions, which are deducted from your taxable income each year. You will also need to report any earnings that were generated by those investments. And if you take out any money from your account, you will have to report that as well.

Who Must File

If you made contributions to your Roth IRA during the year—either through automatic deductions from your paycheck or by sending money directly from your bank account—then you must file this form with your annual tax return. This includes anyone who earned income from work or business activities and anyone who inherited an IRA prior to reaching age 59½ years old.

If no contributions were made during the tax year, then filing form 5498 is not required by law, but may be helpful in determining whether to make future contributions based on your income level and other factors.

When and Where to File Roth IRA Tax Form

A 5498 tax form is the document you will use to report your Roth IRA contributions, distributions, and recharacterizations. Your form should be completed each year that you contribute to your Roth IRA account. 

How Do I file?

You can file your Roth IRA 5498 tax form electronically through your financial institution or by mail. If you choose to file electronically, you will need to have a valid username and password for your financial institution in order to access their website and file your tax forms. If you decide to file by mail, you should check with your financial institution for mailing address information.

Taxpayers can file their own taxes online or by mail. When you file your taxes, you must attach a copy of this form to your return. Be sure to check the tax filing deadline for your state annually. There are two ways to get this form:

1) The easiest way is to go to the IRS website and download the form from there.

2) You can also call 1-800-829-3676 and request a copy of the form be mailed to you.

If you choose not to file electronically, then you will need to make sure that your tax professional has this form available when they file your taxes for you.

When Do I file?

You must complete and submit a Roth IRA 5498 tax form by April 15 of each year in order for any contributions made during the previous calendar year to be reported on that year’s return. You must also complete and submit a Roth IRA 5498 tax form by October 15 if any distributions or recharacterizations were made during that year’s calendar year.

What’s Included on Form 5498: IRA Contribution Information?

Form 5498 is used to report information about your IRA. The IRS requires you to file this form every year if you have an IRA account. This form will tell the IRS how much money you contributed to your IRA during the year, and whether or not you made any withdrawals.

If you have more than one IRA, you will need a separate Form 5498 for each one. You can find all the forms that you require by visiting the IRS website.

You can also use Form 5498 to tell the IRS about any distributions that were taken from an IRA account during the tax year. Not only that, but you will also need this form if you made any nondeductible contributions to a traditional IRA account during the year—this means that part of your contribution was money that came from other sources (like social security benefits), and not just from income or investment gains.

The following information is included on Form 5498:

IRA Ownership and Type

Form 5498 is for IRA contributions, so you will find information about your IRA ownership, such as how many you have and what type they are. For example, if you have traditional IRAs and Roth IRAs, then you will have to fill out two separate forms. This is also where you’ll find information on whether or not the owner of the account is a spouse or non-spouse beneficiary (if applicable).

Form 5498 provides information about the IRA’s owner. This includes:

  • The name of the person who owns the IRA
  • The Social Security number or taxpayer identification number (TIN) of the person who owns the IRA
  • The date you became an owner of this IRA
  • The type of IRA account—traditional or Roth
  • The date you first contributed to this IRA account

The IRS requires that you fill out this form for each year you make a contribution or withdrawal.

Contributions

The first thing you will see on Form 5498 is a list of all the contributions you made during the tax year, along with any earnings or losses on those contributions. 

Contributions are reported on line 1a of Form 5498. These include both deductible and nondeductible contributions, as well as rollover contributions. If you have made any nondeductible contributions, they will be included in this section even though they do not qualify for any tax breaks. Nondeductible contributions may still count toward your annual contribution limit, but don’t reduce your taxable income or provide any other tax breaks. 

The IRS uses this information to make sure that you don’t over-contribute to your Roth IRA and that you have paid the correct amount of taxes on the money you contributed. If you are using a software program like TurboTax to file your taxes, it will help you fill out Form 5498.

Rollovers

This section of Form 5498 covers information about your Roth IRA contributions and conversions from traditional IRAs. If you are simply making a contribution to your Roth IRA, this is all that’s required for the form. 

However, if you converted money from a traditional IRA into a Roth IRA, then you will need to complete this section as well to accurately report the amount of money that was converted.

Withdrawal and Distribution Information

The section includes some basic information about any withdrawals or distributions from your IRA account during the year. It also includes information about whether any of your withdrawals were taxable or not taxable, how much income tax was withheld from them, and how much was returned to you because it was overpaid on your taxes.

You must also list any amounts received under an annuity or endowment contract purchased from an insurance company that is not subject to tax withholding.

If you received a distribution before age 59½, that amount will be subject to an additional 10% early withdrawal penalty unless you meet certain requirements under the “substantial gainful activity” rule.

Traditional IRA Contributions

If you have a traditional IRA, then you will receive a Form 5498 each year that details how much money you contributed to that account. This form will also include any distributions made from your account during the year. If you are married and file jointly with your spouse, then only one Form 5498 will be sent to both of you, so that you can split up any distributions made from the account between yourselves. The form also provides information about any rollover or conversion transactions which took place during the year.

Traditional IRAs are funded with pre-tax dollars, so if you make a contribution, it will reduce your taxable income for that year. Any earnings in the account are also tax-deferred until withdrawal at retirement age (59½). You can withdraw without penalty after 59½ years old as well as before then, if certain conditions are met. 

Roth IRA Contributions

Roth IRA contributions are made with after-tax dollars. The contributions to a Roth IRA are not tax-deductible, but you will never pay taxes on earnings or withdrawals of the funds invested in your Roth IRA. You can withdraw your contributions at any time without paying a penalty or taxes, but you will have to pay taxes on any earnings if you take them out before age 59½.

Form 5498 is used to report information about your Roth IRA account(s) for the year. It will tell you how much you have contributed to your Roth IRA and when, as well as any withdrawals you made during the year. It also includes information about what happened to any money in your account at the end of the year (if there was any left over).

It’s important that you keep track of all of these contributions, withdrawals, and other transactions because they can affect your tax situation in different ways depending on whether they are considered qualified or non-qualified distributions.

SIMPLE & SEP Plans

There are two types of plans that Roth IRAs can come from: SIMPLE and SEP.

For both types of plans, you will need to file a 5498 tax form each year. This will help you report your contributions and distributions for the year.

SIMPLE IRAs are individual retirement accounts that don’t require a lot of paperwork or administration. You can open one with just $250 in contributions per year at fair market value. There is no risk to your employer if they choose not to participate in the plan.

SEP IRAs are more complicated than SIMPLE IRAs because they require more administration on both ends—your employer has to set up their own plan and keep track of it throughout the year. However, they also allow for higher contribution limits than SIMPLE IRAs do (up to $24,000 per year).

The Bottom Line

While it is true that setting up a Roth IRA can make your taxes seem more complicated, the benefits of this tax-free account far outweigh its downsides. Plus, this is only temporary. Once you have had a Roth IRA for a few years, setting up your taxes will be a breeze. And even when you are starting out, it is not difficult to understand the paperwork associated with tax season for your Roth IRA. What’s more, the 5498 form is surprisingly straightforward if all the directions are followed correctly.

Looking for more financial tips and tools? Check them out here. 

About the Author Tiffany Aliche

Tiffany “The Budgetnista” Aliche, is an award-winning teacher of financial education, America’s favorite, personal financial educator, and author of the New York Times Bestselling book, Get Good with Money. The Budgetnista is also an Amazon #1 bestselling author of The One Week Budget and the Live Richer Challenge series and most recently, a children's book, Happy Birthday Mali More.

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