I.R.S. form 5498 - IRA Contribution Information

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AAA
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I.R.S. form 5498 - IRA Contribution Information

Post by AAA »

I'm in the process of reducing the load of paperwork that I've collected and have these forms going back many years. In more recent times, I was supplied these in electronic form but didn't bother to print them out. I've searched several sources for suggestions about how long to retain them and just wanted to make sure of what I've concluded, namely, that if you are over 59 1/2 and have had a Roth IRA for more than five years, there is no need to keep the forms. Likewise if you have a traditional IRA with all pre-tax contributions, the last of which was made many years ago. Thanks.
bberris
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Re: I.R.S. form 5498 - IRA Contribution Information

Post by bberris »

I think a 5+ year old statement suffices to prove five-year opening of the account. You don't have to wait 5 years from each contribution, the wait begins from the first contribution tax year (which might have been the following year) from any roth account.
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Tamarind
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Re: I.R.S. form 5498 - IRA Contribution Information

Post by Tamarind »

I tend to accumulate paper too, but I would keep the annual doc (whether IRS form or account statement) that could serve as proof of your contribution amount, especially if you've changed custodians. If you needed to make an early withdrawal due to some hardship, you should be able to prove the amount you are withdrawing is from contributions and so not subject to penalties. No need to keep hardcopy - scan it and keep the file backed up.
NoHeat
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Re: I.R.S. form 5498 - IRA Contribution Information

Post by NoHeat »

AAA wrote: Wed Aug 29, 2018 2:06 pm just wanted to make sure of what I've concluded, namely, that if you are over 59 1/2 and have had a Roth IRA for more than five years, there is no need to keep the forms.
That’s a very good and specific question, re form 5498. I’ve never seen an authoritative answer anywhere, including in the IRS publication that talks of how long to keep tax returns.

Not having any good info, I’ve been keeping a hard copy forever.
tomd37
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Re: I.R.S. form 5498 - IRA Contribution Information

Post by tomd37 »

You never know when you might need the Form 5498 so I would recommend you keep each one. When our son passed away those forms came in very handy for our daughter, who inherited his Roth IRAs, to prove when the IRAs were funded. I am sure there are other reasons to keep them also.
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SoAnyway
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Re: I.R.S. form 5498 - IRA Contribution Information

Post by SoAnyway »

For what it's worth OP, I have scanned .pdf copies of every Form 5498 and Form 8606 - and Form 1040, related schedules, and every other form I've ever filed with the IRS, for that matter. These electronic copies are all stored in 3 places - computer hard drive, external hard drive, cloud back-up. They date back to the early 80s.

Why do I keep these records (electronic, NOT paper)? Well, you never know when the IRS might come knocking with some bogus assertion that you screwed up something years ago, and you now owe the government more in taxes - plus interest and penalties. This scenario is even more likely now that the IRS is using computers to robo-send "automated underreporter inquiries". (Search for "CP2000" on this site, and you'll understand.) Under the US tax code (admittedly oversimplifying a bit here), unlike in a criminal court, a taxpayer contacted by the IRS is guilty as charged until the taxpayer can PROVE him/herself innocent.

I've only been contacted twice by the IRS. In each instance, I was SO glad I had the records. A simple letter, very respectful in tone, very organized in presentation, with copies of all relevant back-up documentation, quotes from the relevant IRS publications, and an invitation to the IRS to contact me in any of three ways (email, phone, snail mail) was enough to make them go away in each situation.

My advice: By all means, shred all that paper. Before doing so, though, scan it and store it in some organized/accessible fashion that suits your preferences. Just in case.
Nothing in this post constitutes legal or medical advice. | Consult your attorney or physician to verify if/how anything stated might or might not be applicable to your specific situation.
gurusw
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Re: I.R.S. form 5498 - IRA Contribution Information

Post by gurusw »

Hello,

I came across this thread while searching for "how long to keep 5498". The reason being I do not have old 5498s... meaning I only have about last 10 years of 5498s, I do not have 5498s for the first 10 years of my contributions. I had also changed custodians in those first 10 years.

Any idea what can I do about those 10 years? Can I contact the respective financial instriutions, and ask for 5498s, or annual statements; or should I just be diligent about the forms going forward?

Thanks in advance.
Alan S.
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Re: I.R.S. form 5498 - IRA Contribution Information

Post by Alan S. »

gurusw wrote: Mon Jun 22, 2020 5:35 pm Hello,

I came across this thread while searching for "how long to keep 5498". The reason being I do not have old 5498s... meaning I only have about last 10 years of 5498s, I do not have 5498s for the first 10 years of my contributions. I had also changed custodians in those first 10 years.

Any idea what can I do about those 10 years? Can I contact the respective financial instriutions, and ask for 5498s, or annual statements; or should I just be diligent about the forms going forward?

Thanks in advance.
Conservative advice is to keep them forever, but the chances you will ever need them is very small IF you avoid other messes related to your IRA contributions, recharacterizations, conversions etc.

In the outside chance you need to provide info to the IRS there are other ways to document that you made a contribution such as IRA activity statements, bank check records, or tax prep records if you have been using the same preparer for years and you provide them with an accurate organizer form each year. The professional tax program should capture and carry forward your TIRA basis and Roth contribution basis. I think IRS transcripts only go back maybe 10 years at most, but you can request 5498 copies from the IRS if needed within that window. Again, it's very unlikely you will need ever need this info, but keep the forms going forward.

For Roth contributions, after you reach 59.5 all you need is one 5498 showing a contribution at least 5 years in the past since that documents that your Roth is forever qualified and tax free.

In the past the IRS has shown almost no interest in conflating a current tax filing excess contribution or other IRA problem to prior years in which you might have been making the same violation for years.

Note that establishing TIRA basis requires not only a 5498, but also your tax return showing you did not deduct the contribution since the 5498 does not document IRA basis, only a contribution. If you did not, then you need to file an 8606 for that year. In fact, even if you have a 5498 showing a contribution, you might have withdrawn that contribution or recharacterized it. You would then need the 1099R to pair up with the 5498 for the final contribution status for a given year.

In short, unless you have a current issue with the IRS, I would just keep these forms going forward, or at most summarize what info you do have. I would not undertake a massive project to reconstruct everything from day 1 unless the IRS happens to challenge you.
gurusw
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Re: I.R.S. form 5498 - IRA Contribution Information

Post by gurusw »

Thanks a lot for the advice, Alan.
FactualFran
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Re: I.R.S. form 5498 - IRA Contribution Information

Post by FactualFran »

According to What Records Must I Keep section of the instructions for Form 8686:
To verify the nontaxable part of distributions from your IRAs, including Roth IRAs, keep a copy of the following forms and records until all distributions are made.
  • Page 1 of Forms 1040 or 1040-SR (or Forms 1040A, 1040-NR, or 1040-T) filed for each year you made a nondeductible contribution to a traditional IRA.
  • Forms 8606 and any supporting statements, attachments, and worksheets for all applicable years.
  • Forms 5498, IRA Contribution Information, or similar statements you received each year showing contributions you made to a traditional IRA or Roth IRA.
  • Forms 5498 or similar statements you received showing the value of your traditional IRAs for each year you received a distribution.
  • Forms 1099-R or W-2P you received for each year you received a distribution.
Note that the wording is for Forms 5498 or similar statements with IRA contributions made each year and the end of year values.
Alan S.
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Re: I.R.S. form 5498 - IRA Contribution Information

Post by Alan S. »

Goes to show that someone at the IRS has a sense of humor!

Anyone who has retained all of this info for even 25 years should step up for a special award. But of course, the IRS said until the accounts are fully distributed. Such accounts are not even fully distributed by death in many cases, since many are inherited and therefore are finally fully distributed by some beneficiary.

Perhaps a supplemental benefit of the 10 year rule is the de cluttering industry. :oops:
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neurosphere
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Re: I.R.S. form 5498 - IRA Contribution Information

Post by neurosphere »

Look at what I found!!

viewtopic.php?t=174453#p2636329
I e-mailed Vanguard last week requesting copies of Form 5xxx, (IRA contributions), and the year-by-year history arrived in the mail today, back from the early 90's.
Seems too good to be true. I also have "missing" 5498 forms from my earliest years that I hope I'll never need, but...I guess I can get them from Vanguard? I wonder if I should get them NOW. :D
If you have to ask "Is a Target Date fund right for me?", the answer is "Yes".
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