IRA Statements You Will Receive in May

Wednesday, May 30, 2012

By Joe Cicchinelli, IRA Technical Expert
Follow Me on Twitter: @JoeCiccEdSlott

The end of May brings the Memorial Day holiday and the start of the summer season. It’s also the time that you will receive information about your IRA from your financial institution.

IRS Form 5498, IRA Contribution Information, is used by custodians to report information about your IRA from last year. The form is used for all types of IRAs including Roth, SEP and SIMPLE IRAs. It shows all contributions, the year-end fair market value (FMV), and certain information about required minimum distributions (RMDs) at age 70 ½ for the IRA account.

The deadline for sending this information to you and the IRS is May 31 (that’s tomorrow!). For example, the 2011 Form 5498 is submitted by May 31, 2012. The form also comes with a section titled “Instructions for Participant,” which explains the information in plain English.

Earlier this year, by January 31, the IRA custodian should have sent you a statement that included the FMV of your IRA on December 31 of the prior year (i.e., the December 31, 2011 FMV was sent by January 31, 2012). That statement also likely included all IRA contributions and deposits that were made such as rollovers, conversions, and recharacterizations. This statement is often called the “annual statement.” If all the IRA contribution information was previously provided to you on the IRA annual statement you received in January, then there’s no need to give you that same information again on Form 5498 in May.

When you are age 70½ or older, your custodian is required to notify you, by January 31 of each year, about your RMD. Form 5498 includes this information and can be used to satisfy these RMD notification rules. However, many custodians will send you a separate RMD statement (or include the RMD info in your annual statement); therefore, the RMD information on Form 5498 is often left blank because you were previously provided with that information.

If you have any questions on the information provided on either your annual statement or Form 5498, contact your IRA provider or your financial advisor as soon as possible. You should check to see that all your contributions, rollovers and conversions are correctly reported and that the year-end account balance is accurately reported. Double checking this information can help you spot errors that need to be corrected.
 

 

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