During tax time, you might have heard mention of various IRS forms, such as Form 1099-R or 5498, relative to your self-directed account(s). Here’s a quick explanation of each, as well as events that would trigger generation of these forms.
Form 1099-R
This form reports any distributions totaling $10 or more from a retirement account, and any federal or state withholding that has been remitted to the IRS on behalf of the account holder. It also reflects what kind of distribution was taken, for instance, a premature distribution, normal distribution, or a return of excess. Forms are mailed by January 31.
Form 5498
This form reports contributions, rollovers, the Fair Market Value (FMV) of your account, and Required Minimum Distribution details.
This form is only generated if there is reportable activity like a contribution or rollover. If the account had no reportable activity, the FMV is reported on your year-end statement and to the IRS. Qualified plan account types do not generate a 5498. Forms are mailed by May 31.
[Related: Is Tax Form 5498 Important to You?]
Rollover contributions
This is when an account holder takes a distribution from an IRA (reportable on a 1099-R form) and rolls the money back into an IRA (which can be at another custodian) within the IRS-regulated 60-day timeframe (reportable on a 5498 form). The distribution is offset by the rollover contribution.
