In an IRA, HSA, or similar account that you may have contributed to, you will probably receive Form 5498 from the IRS, which is a valuable document for your tax records. Form 5498 discloses contributions and rollovers, as well as the fair market values of Individual Retirement Accounts (IRAs). Even though you do not use this form to file with your tax, it is an important tool in confirmation of the IRS of your retirement contributions.

What Is Form 5498?

Your financial institution or IRA trustee issues Form 5498, and not the IRS itself. It records all receivables in your Traditional IRA, Roth IRA, SEP, or SIMPLE IRA in the course of the tax year. It also indicates the fair market value (FMV) of your account on December 31, and indicates whether you have made any of the required minimum distributions (RMDs).

When Do You Get Form 5498?

Form 5498 is sent out to the majority of taxpayers by May 31 annually. This gives time to include contributions made between January 1 and the time of filing the tax (which is usually April 15). Store this form with your records - you will need it to prove that your IRA contributions have been properly reported.

The importance of Form 5498 to your Taxes.

Although you do not file the Form 5498 with your tax filing, the IRS uses it to compare your IRA contributions and rollovers reported. Errors or omissions may have an impact on your deductions, eligibility for a Roth IRA, or retirement.

Key Takeaway

Do not leave out reading your 5498 tax form. Make sure that what you have contributed corresponds to what you have told on your tax returns. It is beneficial to maintain this form in order and make the IRS audit go more easily and eliminate the stress during the tax season.