Understanding the Vitally Important IRS Form 5498

Example 5.  Carlos, age 43, made his first Roth IRA contribution in 2008 in the amount of $2,000. Carlos received a 2008 Form 5498 from his IRA contribution indicating in Box 10 his Roth IRA contribution of $2,000. The $2,000 Roth IRA contribution was Carlos’ first Roth IRA contribution and also locks in his Roth IRA starting date for the “five-year forever” clock as of January 1, 2008. Carlos subsequently contributed $5,000 a year to his Roth IRA for the next 17 years (2009 – 2025) a total of $85,000. Carlos’ custodian continues to send Carlos and the IRS a new Form 5498 each year. In 2026, Carlos’ total Roth IRA balance is $175,000. Carlos needs cash to cover an emergency expense. By totaling the amounts in Box 10 of Form 5498 for all the years he contributed to his Roth IRA, Carlos determines that he has access to $87,000 ($2,000 plus $85,00) that is free-and-clear of any taxes or early withdrawal penalties. Note that a Roth IRA owner always has access to his or Roth IRA contributions, no matter the Roth IRA owner’s age. That means the Roth IRA owner can withdraw some or all of the Roth IRA contributions with no income tax consequences.

2. Box 11 (Check if RMD for 2026). An “X” placed in Box 11 lets the IRS know which traditional IRA owners are subject to required minimum distributions during 2026. Note that while IRA custodians are required to notify the IRS of all traditional IRA owners who are subject to RMDs, they are not required to calculate the actual amount.
3. Box 12a (RMD date). The date shown in Box 12a is the deadline by which the RMD amount in Box 12a must be distributed in order for the traditional IRA owner to avoid the missed RMD penalty resulting from the undistributed amount.
4. Box 12b (RMD amount). If a traditional IRA owner is required to take a traditional IRA RMD, then the IRA custodian must notify the traditional IRA owner by January 31 of the RMD year. This obligation can be fulfilled by sending either Form 5498 ( with information shown in Box 12a and in 12b) by the date or providing a separate statement offering to calculate the RMD.

Traditional IRA owners should be aware that the amount shown in Box 12b may not be accurate for the following reasons: (1) Use of the wrong life expectancy table; (2) There may have been an outstanding rollover at the end of the year; and (3) Box 12b is indicative of the RMD for only the traditional IRA held with that IRA custodian. If the traditional IRA owner owns other traditional IRAs held with other institutions, then those traditional IRAs will have their own RMDs. Most importantly, a traditional IRA custodian is not obligated to properly calculate an RMD. That responsibility belongs to the traditional IRA owner.

4. Box 13a, 13b, and 13c (Postponed/late contribution; year; code). Late rollovers (that is, beyond the normal 60-day rollover window) may be accepted by the IRS. This is done by the traditional IRA owner providing the receiving financial institution with “self-certification” as to the reason for the late rollover. Form 5498 requries the late rollover information to be included in Boxes 13a,13b and 1c. The “Code” shown in Box 13c include: (1) FD-extension of the contribution due date because of a federal designated disaster; (2) PO – a rollover of a qualified retirement plan or TSP loan offset; and (3) SC – the self-certification procedure for a late rollover contribution.
5. Box 15a (Fair Market Value of certain specified assets). IRA owners can purchase unconventional assets in their accounts without creating a prohibited transaction. The IRA owner’s challenge, however, is to place a value on alternative assets. Frequently, it is up to the IRA owner to provide an accurate annual valuation of nontraditional investments to the custodian who ultimately reports the value in Box 15a of Form 5498. Note that if the IRA custodian fails to receive a fair market value and leaves Box 15a blank, this could raise a red flag with the IRS.
6. Box 15b (Codes). If unusual or hard-to-value investments are held in an IRA and if Box 15a reports a value, the IRS will want to know what the investment is. Box 15b provides several codes for clarification.  For example, Code C is for ownership interest in an LLC, and Code D is for real estate.

Form 5498 has additional information about recharacterized IRA contributions (Box 4), the type of IRA (Box 7) and details about any repayment of a distribution taken for allowable reasons such as a qualified disaster, birth or adoption, or withdrawal by a terminally ill individual (Box 14a and 14b).

IRA owners who have problems or questions concerning the information shown on their Form 5498 are advised to speak with a tax professional who is knowledgeable in retirement plans and IRAs.

 Edward A. Zurndorfer is a CERTIFIED FINANCIAL PLANNER™ professional, Chartered Life Underwriter, Chartered Financial Consultant, Chartered Federal Employee Benefits Consultant, Certified Employees Benefits Specialist and IRS Enrolled Agent in Silver Spring, MD. Tax planning, Federal employee benefits, retirement and insurance consulting services offered through EZ Accounting and Financial Services, and EZ Federal Benefits Seminars, located at 833 Bromley Street - Suite A, Silver Spring, MD 20902-3019 and telephone number 301-681-1652. Raymond James is not affiliated with and does not endorse the opinions or services of Edward A. Zurndorfer or EZ Accounting and Financial Services. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional.

TSP: The Thrift Savings Plan (TSP) is a retirement savings and investment plan for Federal employees and members of the uniformed services, including the Ready Reserve. The TSP is a defined contribution plan, meaning that the retirement income you receive from your TSP account will depend on how much you (and your agency or service, if you're eligible to receive agency or service contributions) put into your account during your working years and the earnings accumulated over that time. The Federal Retirement Thrift Investment Board (FRTIB) administers the TSP.

RMDs: RMD's are generally subject to federal income tax and may be subject to state taxes. Consult your tax advisor to assess your situation.

IRAs: Contributions to a traditional IRA may be tax-deductible depending on the taxpayer’s income, tax-filing status, and other factors. Withdrawal of pre-tax contributions and/or earnings will be subject to ordinary income tax and, if taken prior to age 59 1/2, may be subject to a 10% federal tax penalty.

Roth IRA: Like Traditional IRAs, contribution limits apply to Roth IRAs. In addition, with a Roth IRA, your allowable contribution may be reduced or eliminated if your annual income exceeds certain limits. Contributions to a Roth IRA are never tax deductible, but if certain conditions are met, distributions will be completely income tax free. Roth IRA owners must be 59½ or older and have held the IRA for five years before tax-free withdrawals are permitted.

Roth Conversions: Unless certain criteria are met, Roth IRA owners must be 59½ or older and have held the IRA for five years before tax-free withdrawals are permitted. Additionally, each converted amount may be subject to its own five-year holding period. Converting a traditional IRA into a Roth IRA has tax implications. Investors should consult a tax advisor before deciding to do a conversion.