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The Curious Bag
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If you have an individual retirement account (IRA), you will receive Form 5498 each year from the financial institution that you have your IRA with. Internal Revenue Service (IRS) Form 5498 contains information that may affect the amount of federal income taxes you owe.
Identification
Form 5498 is used to report how much you contributed to your IRA during the previous year. The form also reports how much the total value of your IRA was at the end of the year.
Time Frame
Form 5498 is mailed at the end of April or in May. You have the option to make IRA contributions for the previous year through April 15 of each year, and the form must be sent after the deadline for contributions.
Function
In some cases, the amount of money you contribute to your IRA can be deducted on your federal income tax return. Form 5498 provides a record or proof of your contributions.
Features
Your financial institution sends one copy of Form 5498 to you and one to the IRS.
Considerations
To determine how the contributions reported on Form 5498 affect the amount of federal income taxes you owe, contact an accountant or tax preparer. The eligibility and amount of deductions varies based on a number of criteria, such as your income and age.
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