Obtain a tax form for IRA contributions

I just received Form 5498 in the mail from my IRA administrator, reporting my 2014 contribution to my IRA. What should I do with this form and why have I received it now?

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Form 5498 shows your contributions to a Traditional or Roth IRA, or to a SEP or SIMPLE account, for 2014. It also shows whether you transferred money from another retirement plan, such as a 401 (k ), to an IRA or converted from a traditional IRA to a Roth. Plan custodians should send these forms no later than May 31 to anyone who has made a contribution, rollover or conversion for 2014.

You do not need to attach this form to your tax return because the custodian sends a copy to you and the IRS. But it is important to review the document for errors. Mari Adam, a certified financial planner in Boca Raton, Fla., Saw various errors that plan custodians needed to correct, such as reporting an IRA contribution in the form of a rollover (which could be a problem if you took a tax deduction for the contribution). Another client consolidated several pension plans and integrated them into an IRA, but the 5498 did not show the rollover.

“If your tax return doesn’t match the 5498 or 1099-R filed with the IRS, it could trigger an IRS investigation,” says Adam. She recommends contacting the custodian immediately and asking them to send a corrected form to the IRS.

Keep Form 5498, in case you change custodians or need to search for information on past contributions. “Your custodian will normally archive these forms online for 10 years, but if you change custodians or close accounts, you may lose access to the online forms,” says Adam. And if you’re making non-deductible IRA contributions, don’t forget to complete Form 8606, which keeps track of the cumulative base in your IRAs, so you don’t end up paying extra taxes when you finally withdraw the money. . See Do not throw away these tax documents for more details.

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