If you are saving for retirement with an individual -retirement- arrangement, you receive Form 5498 annually.
Your Individual Retirement Account needs to report your contribution to the IRS during the tax year.
There are several retirement accounts. However, depending on your IRA you may need Form 5498 to report your contributions.
What contributions does Form 5498 report?
According to Turbotax, “rollover or conversion of assets from one retirement plan into an IRA isn’t deductible.”
However, they are considered contributions and need to be reported on Form 5498.
-The amount you contributed to a traditional IRA.
-The amounts contributed to a Savings Incentive Match Plan for Employees (SIMPLE) IRA.
-The amounts you put into a Roth IRA.
What transfers aren’t reported on Form 5498?
-A traditional IRA to another traditional IRA or a SEP IRA,
-A SIMPLE IRA to another SIMPLE IRA,
-A SEP IRA to another SEP IRA or a traditional IRA
-A Roth IRA to another Roth IRA.
Turbotax also mentions that straight trustee-to-trustee transfers usually are not reported on Form 5498.
Can I deduct my contributions?
Depending on your eligibility you can make deductible your contributions to a traditional IRA.
When you begin taking withdrawals, you need to report the exact amounts as income on your tax returns.
All the limits on the possible deductions appear in box 1 of Form 5498.
Every year, there’s a new maximum contribution amount subjected to taxpayers that the law imposes.
Nevertheless, depending on your retirement plan at work and spouse contributions to a different IRA account, you may not be eligible to take a full deduction.