By Peter Wechsler
President & Co-Founder, Franklin Retirement Solutions
[email protected]
As I write this missive on Wednesday morning, I’m watching the futures pop as May’s inflation numbers came in as anticipated and Trump signaled that he had a deal with China on trade. Hopefully, the market continues to move forward as all three major indexes are now positive for the year. OK…just slightly positive but better than where we were in April.
As a reminder, if you are one of the lucky taxpayers that needs to submit quarterly estimated taxes, Monday the 16th is the day. Enjoy.
Some of you may have received IRS Form 5498 in the mail recently. This form, labeled IRA Contribution Information, is used to report contributions to your IRA.
As we wrote last year, the reason you receive the 5498 after the tax filing deadline is because it accounts for contributions made until the tax deadline of the following year (usually April 15). These forms should have arrived by 5/31/25.
Form 5498 serves several important functions:
- Tracking Contributions: It provides a record of how much you’ve contributed to your IRA, which is crucial for ensuring you do not exceed the annual contribution limits set by the IRS. For 2024, the contribution limit was $7,000 for individuals under 50, and $8,000 for those 50 and older. Same limits for 2025.
- Tax Reporting: The IRS uses this form to verify that your IRA contributions align with the deductions you claim on your tax return. This helps prevent errors and potential audits.
- Rollover and Conversion Documentation: If you’ve rolled over funds from another retirement account or converted a Traditional IRA to a Roth IRA, Form 5498 will reflect these transactions, helping both you and the IRS keep accurate records.
- Fair Market Value: The form reports the FMV of your IRA as of December 31, providing a snapshot of your account’s value at the end of the year. This information can be useful for your financial planning and required minimum distributions (RMDs).
Unlike many tax forms, Form 5498 does not need to be filed with your tax return. Instead, it serves as a record for you and the IRS. Keep this form with your tax records, as it helps ensure the accuracy of your IRA contributions and any potential deductions or credits.
As always, if you have any questions about Form 5498 or just about your retirement accounts in general, give us a call, and we’ll be happy to help!
As I close, let me wish all the dads out there a Happy Father’s Day. My oldest son had planned a family BBQ on Saturday to celebrate, but it’s up in the air right now with rain in the forecast. The whole family will hopefully be together including all 5 of my kids, my favorite ex, and a few cousins. Pray for sunshine on Saturday!
Enjoy the weekend…
Peter