Each year around this time we receive questions regarding Form 5498. We thought we’d take this opportunity to answer the most common questions regarding these forms:
Q: Why did I receive this Form 5498, and what is it for?
A: Form 5498 is issued by custodians to report to the IRS information regarding IRA accounts. Among other things, the form reports contributions, Roth conversions, recharacterizations, fair market value of your account, and required minimum distribution amount (RMD). So if you have an IRA, and either contributed money into it in any fashion, or are over age 70 ½, and were required to take money from your IRA, you likely received a Form 5498.
Q: Why is the RMD amount listed in box 12b smaller than the amount that you told me I was required to distribute from my IRA?
A: The Form 5498 you received only covers the RMD for one account. When we perform our required minimum distribution (RMD) calculation for you, we aggregate all of your IRA accounts, as that is how the IRS requires that the calculation be performed. The IRS does not require that an RMD be taken from each and every IRA account you own – only that the total taken from all IRA accounts equal or exceed the RMD as calculated for all of your IRA accounts.
Q: Why am I getting this now? Wasn’t April 15th the tax filing deadline?
A: The IRS deadline for custodians to file these reports is the end of May. Since they may contain contribution information – and since prior year IRA contributions can be made up until the April 15th tax filing deadline – it would be impossible for custodians to report these contributions prior to April 15th. And since you are not required to include Form 5498 as part of your tax return, the date you receive your Form 5498 has no impact on your ability to file your tax return in a timely manner.
Q: Do I need to submit this form 5498 to the IRS, or to my accountant, or to McLean Asset Management Corporation?
A: No. Form 5498 is sent to you for informational purposes only. We encourage you to file it with your other tax records for last year. The custodian has already provided a copy of it directly to the IRS, and we at McLean already have access to all of your tax documents issued from any TD Ameritrade account that we manage for you.
If you have any additional questions, please let us know and we’ll be happy to answer them for you.