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Post 4: Decoding Form 1099-R and Form 5498
As tax season continues, it’s important to understand Form 1099-R and Form 5498. These account documents are key to managing your retirement plans effectively.
Form 1099-R: Distributions from Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.
Timing: January 31
What It Is: This form reports any distributions you’ve taken from your retirement plan, including IRAs. Whether it was a standard distribution, rollover, or conversion, it’s all detailed here.
Why It Matters: Knowing the ins and outs of your distributions is crucial for tax planning and ensuring you’re leveraging your investments to their fullest potential.
Form 5498*: IRA Contribution and Account Value Information
Timing: End of May
What It Is: This form details the contributions made to your IRA during the tax year, including rollovers and recharacterizations.
Why It Matters: Contributions can affect your tax deductions and eligibility for certain tax credits. Form 5498 helps you—and the IRS—keep track of your annual contributions, ensuring you’re maximizing your investment’s growth.
*NOTE: Your Account Statement is a substitute 5498 provided it reflects the value of your account as of December 31st and is available on demand by logging into the Client Portal.
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Please note that the contents of this blog are accurate as of the date of publication and are provided for informational purposes only. They are not intended, and should not be construed, as financial, legal, or other professional advice. Readers are encouraged to perform their due diligence and should always consult a qualified financial professional before making any investment decisions.
