Advertisement
retirement

Help with Tracking IRA Contributions

Your investment firm will send you a form to verify any contribution you make to an IRA. This can come in handy later if you’re trying to figure taxes on withdrawals.

Question:

I received Form 5498 in the mail a few weeks ago from the brokerage firm where I have my traditional IRA. It shows the IRA contribution I made for last year, but it came after I filed my taxes, so I was confused about what I need to do with it. Should I have submitted this with my tax return?

Answer:

Advertisement - Article continues below

IRA administrators must send Form 5498 by May 31 following the tax year of the contribution, so you usually receive the form a few weeks after the tax-filing deadline. You don’t need to do anything with it when you file your taxes, but you should keep it in your files for the future. This form reports the contributions you made to your traditional IRA. It also includes sections reporting any contributions to a Roth IRA, a Simplified Employee Pension (SEP) or a SIMPLE IRA, as well as rollover contributions, Roth conversions and other information.

Keeping Form 5498 can be particularly helpful if you made nondeductible contributions to a traditional IRA. If you made any traditional IRA contributions that were not tax-deductible, then a portion of your withdrawals will be tax-free. If you haven’t kept records of your nondeductible contributions, Form 5498 can provide some clues. The form doesn’t show whether your contribution was tax-deductible, but you can compare it with your old tax returns to see if you deducted the contribution, says Steven Hamilton, an enrolled agent with offices in Chicago and Spring Hill, Fla. (Enrolled agents are tax advisers who can represent taxpayers before the IRS.)

Advertisement
Advertisement - Article continues below
Advertisement

Most Popular

65 Best Dividend Stocks You Can Count On
stocks

65 Best Dividend Stocks You Can Count On

These 65 Dividend Aristocrats are an elite group of dividend stocks that have reliably increased their annual payouts every year for at least a quarte…
July 8, 2020
8 Ways You Might Be Cheating on Your Taxes
taxes

8 Ways You Might Be Cheating on Your Taxes

Don't fall into these common traps that can get you in hot water with the IRS.
July 8, 2020
Find a Great Place to Retire
happy retirement

Find a Great Place to Retire

Our cities provide plenty of space to spread out without skimping on health care or other amenities.
July 2, 2020

Recommended

12 Tax Deadlines for July 15 (It's Not Just the Due Date for Your Tax Return)
tax deadline

12 Tax Deadlines for July 15 (It's Not Just the Due Date for Your Tax Return)

Between due dates for IRA or HSA contributions, paying estimated taxes and other deadlines, there's more to do by July 15 than just filing your federa…
July 10, 2020
Saver's Credit: A Retirement Tax Break for the Middle Class
Tax Breaks

Saver's Credit: A Retirement Tax Break for the Middle Class

Your retirement contributions could be the key to a lower tax bill.
July 9, 2020
Avoid Blindly Following Random Benchmarks on the Road to Retirement
retirement planning

Avoid Blindly Following Random Benchmarks on the Road to Retirement

Unless the benchmark is relevant to your personal plan, it could steer you into taking a wrong turn.
July 8, 2020
Where Should You Retire?
retirement planning

Where Should You Retire?

This week, our Your Money's Worth podcast host Ryan Ermey interviews co-host Sandy Block about her recent story about the best retirement destinations…
July 7, 2020