You may be receiving, or possibly have already received Form 5498, IRA Contribution Information, from your custodian. This form is informational only and is not needed to file your prior year return. In most cases, information included on Form 5498 has been accounted for on your tax return. Those who have already filed their tax return, generally, will not need to revise or amend their return.
What is Form 5498?
Form 5498, issued by your financial institution, reports information about individual retirement accounts and other tax-preferred savings accounts. The form is filed with the IRS, and a copy is sent to the account owner. Essentially, this form provides independent confirmation to the IRS of the amounts you contributed, including catch-up contributions, required minimum distributions and the fair market value of your individual retirement arrangement for the previous year. Form 5498 is required to be filed with the IRS by May 31st.
However, what is confusing for many is that some accounts are reported differently. An IRA may be reported on a tax year basis while a SEP-IRA may be reported on a calendar year basis. Some investors do not always make the contribution in the year that they are deducting the contribution. For example, you have until the tax filing deadline plus extensions to make a SEP contribution for the prior year. This is why you may see different balances than what you reported on your tax return.
At Henssler Financial we believe you should Live Ready, which includes understanding how your retirement account contributions are reported to the IRS. If you have questions, the tax experts at Henssler Financial will be glad to help. You may call us at 770-429-9166 or email at experts@henssler.com.
Disclosures
This article is meant to provide valuable background information on particular investments, NOT a recommendation to buy. The investments referenced within this article may currently be traded by Henssler Financial. All material presented is compiled from sources believed to be reliable and current, but accuracy cannot be guaranteed. The contents are intended for general information purposes only. Information provided should not be the sole basis in making any decisions and is not intended to replace the advice of a qualified professional, such as a tax consultant, insurance adviser or attorney. Although this material is designed to provide accurate and authoritative information with respect to the subject matter, it may not apply in all situations. Readers are urged to consult with their adviser concerning specific situations and questions. This is not to be construed as an offer to buy or sell any financial instruments. It is not our intention to state, indicate or imply in any manner that current or past results are indicative of future profitability or expectations. As with all investments, there are associated inherent risks. Please obtain and review all financial material carefully before investing. Henssler is not licensed to offer or sell insurance products, and this overview is not to be construed as an offer to purchase any insurance products.
