5498 Questions and Information For 2007
What is the purpose of a 5498?
A form 5498 is sent to the contract owner and the IRS; however, the form is not filed with the individual tax return. A 5498 is an IRS tax form that reports the year-end fair market value, contributions, conversions, rollovers, and recharacterizations for IRAs, including SEP, Simple, Roth, and inherited IRA contracts.
When is the 5498 mailed?
- is required to mail the form 5498 to the contract owner by May 31 of the year following the tax year being reported. Due to carryback contributions that can be made up until April 15 of the following year, the IRS does not require 5498’s to be mailed until May 31.
- The 5498 is only for your records, although a copy can be provided to your tax advisor.
Who receives a 5498?
- Any IRA contract owner, including a SEP, SIMPLE, Roth, or inherited IRA (one to the deceased’s estate, one to the beneficiary) contract owner with a contribution, rollover, conversion, or recharacterization made during the previous calendar year.
- If only the year-end fair market value is reported, will send the form 5498 to the Internal Revenue Service (IRS) only and will not send one to contract owners. Contract owners are notified of the fair market value on their 12/31 statements.
- Fixed contract owners (i.e., Frontiers and Provider) will receive a 5498, unless only the fair market value was reported to the IRS.
How do I access my 5498 online?
A 5498 can be accessed on the My Account Web site—Contract Management as follows:
Active Contracts
For contracts in an active status, the launching point to retrieve 5498 information is from the My Contract section. Under the drop-down menu of available transactions, select "OnLine Tax Documents," from which the 5498 form can be accessed.
Annuitized Contracts
For annuitized contracts, the launching point to retrieve 5498 information will be from the Annuitized Benefits application.
Note:
5498 information is not accessible for inactive contracts (e.g. fully surrendered, free-looked) via the My Account web site.
Frequently Asked Questions
Q: I have not received my 5498 or have misplaced it.
A: The most current 5498 (on active contracts only) will be displayed on the My Account Web site. To access the 5498 on the client Web site, review the instructions above. In addition, a copy of the 5498 can be faxed or mailed to the contract owner or the registered representative/assistant.
Q: Why did I not receive a 5498?
A: If you have a traditional IRA, SEP, SIMPLE, or Roth and did not have a contribution, rollover, conversion, or recharacterization for tax year 2007, you will not receive a 5498. However, the information concerning the fair market value will be reported to the IRS. Also, contracts issued in 2008 with a contribution coded for 2007 will not receive a 5498.
Q: If a contribution was coded incorrectly, can it be corrected?
A: Yes, it can be corrected. However, a corrected 5498 is not automatically sent out. In addition, no corrections can be made to a previous tax year.
Q: Will I receive a 5498 for an IRA-to-IRA direct transfer?
A: No, IRA-to-IRA direct transfers are not tax reportable; no 5498 or 1099-R is generated.
Q: Will I receive a 5498 for a Roth conversion?
A: Yes.
Q: Why is the fair market value listed on the 5498 higher than the 12/31 value listed on my year-end statement?
A: If the contract had either a Roth conversion or was subject to RMDs in the previous calendar year, the actuarial present value (APV), which is the value of any future benefits as of a specific date (12/31) that is associated with an annuity product used to fund a retirement plan or account, must be included in the amount that was converted or used in the calculation of the RMD. This is required by the IRS.
Q. I took a withdrawal for my excess contribution. Can send me a corrected 5498?
A. If you requested a withdrawal of an excess contribution, the excess contribution amount will still show on the 5498. The 5498 cannot be corrected. However, you will receive a 1099-R next January reflecting the excess contribution withdrawal.
Q: How can I correct an excess contribution?
A: Please call Customer Service at for assistance.
Types of transfers- 1035(a) Tax-Free Exchange: Allows for a tax-free exchange of a nonqualified annuity or life insurance contract into a new or pre-existing nonqualified annuity. The contract registration must be like-for-like and the transfer must be a trustee-to-trustee exchange.
- Direct Transfer: A transfer of a qualified plan type to the same qualified plan type (e.g., IRA to IRA, TSA to TSA).
- Direct Rollover: A transfer of a qualified plan type between different plan types (e.g., 401(k) to IRA, TSA to IRA).
Contribution Limits
Tax Year 2007:
Contribution limits for IRA and Roth IRAs are $4,000 for ages less than 50 and $5,000 for ages 50 and older.
Tax Year 2008:
Contribution limits for IRA and Roth IRAs are $5,000 for ages less than 50 and $6,000 for ages 50 and older.
SEP and SIMPLE IRAs:
A contribution to a SEP or SIMPLE IRA contract is always coded with the current tax year, regardless of the instructions received with a payment. Pursuant to IRS reporting guidelines, employer contributions to SEP and SIMPLE IRAs are reported in the calendar year in which the contribution is received. This does not prevent the contract owner from deducting the IRA portion of the contribution; however, the contract owner is responsible for the tax reporting. This matter should be discussed with a tax advisor to review the options that are available to your clients.
