Form 5498

  • Updated

What is IRS Form 5498 and How Does It Impact My IRA?

IRS Form 5498 plays a pivotal role in monitoring and reporting activities within your Traditional, SEP, SIMPLE, Roth, and Inherited IRAs. Here's what you need to know:

 

Comprehensive Reporting: Form 5498 is used to report various annual activities related to your IRA, including contributions, rollovers, conversions, recharacterizations, and year-end fair market values. This form provides crucial information that the Internal Revenue Service (IRS) requires to assess your tax obligations concerning your retirement accounts.

 

Digital Trust's Role: As the custodian of your IRA, Digital Trust ensures the accurate and timely filing of Form 5498. We provide you with a copy of this form through the secure Document Center and diligently file it with the IRS, typically no later than May 31 of each year. The copy furnished to you serves as a vital record for your financial documents and is invaluable for your CPA or tax advisor as they assist you in preparing and filing your tax returns.

 

Transfers vs. Contributions: It's essential to note that IRA-to-IRA direct transfers are not tax reportable, and the transfer amounts are not included on Form 5498. This distinction ensures that tax reporting aligns with the specific nature of transactions.

For a comprehensive understanding of the values and codes appearing on   Form 5498, we recommend referring to the resources provided by the IRS. Understanding the content of this form is crucial for accurate and compliant management of your IRA.