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Instructions for How to Fill in IRS Form 5498

Margarete Cotty

2024-03-22 16:31:28 • Filed to: Other IRS Forms • Proven solutions

IRS Form 5498 reports the total yearly contributions to an IRA account and classifies the type of retirement account that you have, like a traditional IRA, SEP IRA, Roth IRA, or SIMPLE IRA. Once you claim a deduction for your IRA contributions, you have to refer the amounts on the Form 5498.

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Instructions for How to Complete IRS Form 5498

Step 1: Download the IRS Form 5498 from the official website of IRS and import the downloaded file in PDFelement.

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Step 2: Report all of your combined Traditional IRA cash contributions that are made between January 1 of the prior year and April 15 of the current year in Box 1.Write any amounts paid for life insurance in addition to the excess contributions. Don't write any contributions made for your spouse; report those on a different Form 5498. All the contributions of the employees to a SEP-IRA have to be reported here too.

Step 3: Report all rollover IRA contributions in Box 2 of the 5498. This occurred if you moved money from a capable or other retirement plan into an IRA account. It includes any amounts rolled over from a qualified or other non-IRA retirement account into a Roth IRA. Rollovers from a Roth IRA to another Roth IRA, SLGI payments, military death gratuities, and specific types of lawsuit are reported here too.

Step 4: Report all the Roth IRA conversions and reconversions from any kind of SEP, Traditional, or SIMPLE IRA, or eligible plan throughout the year in Box 3. Enter any amounts recharacterized in Box 4. Write the fair market worth of your IRA account as of December 31 in Box 5, following the instructions for hereditary IRAs in the instruction manual for Form 5498.

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Step 5: Write any amount that you included in Box 1 for cost of life insurance for legacy contracts in Box 6. Check what type of IRA account that you're reporting information for in Box 7. Make report of any employer contributions for SARSEP and SEP plans in Box 8. SIMPLE contributions go in Box 9, Roth IRA contributions up to April 15 of the current year go into Box 10, and check Box 11 if you took a necessary minimum distribution throughout the previous year.

Step 6: Enter RMD information in Boxes 12a and 12b and any details about to postponed prior year contributions because of military service in Boxes 13a, B and C. Fill out the Boxes 14a and 14b if you reimbursed any eligible reservist deliveries or repayments. Write any special catch-up contributions you made because of employer liquidation in Box 15a and code "BK" in Box 15b.

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Warnings and Tips for IRS Form 5498

If an IRA owner removes money from his account, these monies are stated on line 12b of Form 5498. The IRS obliges workers to eliminate a specific amount of money from their retirement account annually after age 70 ½, unless they're still working. The IRA manager is going to report how much money was removed from the account with this tax form.
Employees don't need to submit any tax information to the IRS, as the employer is going to give off IRA contribution information for the employee. Tax filers must not attach their copy of Form 5498 to their tax returns. Employees have to keep their copy of Form 5498 for their own records so as to guarantee that the employer didn't make any errors on the return.
The employer is going to mail out a copy of Form 5498 by May 31 of the following year so as to show the employee his present retirement situation. This form presents the total money positioned into the account through the previous year. Furthermore, this statement is going to show the employee his present retirement account balance in the fund.
If you fail to withdraw enough amounts of funds from the IRA, the IRS fines you with a 50% tax on that distribution amount. The fraction of all funds in the account that you're obliged to withdraw, called the "required minimum distribution" or RMD, goes bigger as your age.