Tax Season 2022: What are Form 1099-R and Form 5498? | Schwab - Millennium Trust Company

Tax Season 2022: What are Form 1099-R and Form 5498?

March 7, 2022
By Millennium Trust
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Tax season is officially in full swing, with the filing schedule back to its traditional mid-April deadline after the pandemic extended filing deadlines for tax years 2019 and 2020. Tax Day this year is April 18, 2022, for all U.S. taxpayers except those living in Massachusetts and Maine where the deadline is April 19, 2022, due to Patriot’s Day.

The two primary tax forms you may receive from Millennium Trust are IRS Form 1099-R and IRS Form 5498. Have questions about these forms? Here are a few things you should know about why you are receiving them:

Why would I receive Form 1099-R?

Form 1099-R is used to report rollovers and/or distributions from qualified retirement accounts and IRAs. You will receive a 1099-R this year if:

  • Your qualified retirement plan rolled over to an IRA for you at Millennium Trust.
  • You took a taxable distribution, including your Required Minimum Distribution (see below) or executed a direct rollover to a current employer's qualified plan from your IRA at Millennium Trust.

All 1099-Rs were mailed by January 31. This video further explains IRS Form 1099-R.

Why would I receive Form 5498?

Contributions, including rollovers, made to an IRA for the current tax year are reported by your financial institution to the IRS on Form 5498:

  • You will receive a copy of the 5498 if your qualified retirement plan automatically rolled over to an IRA for you at Millennium Trust and/or you made any other contributions in 2021.
  • This form may also be used to report the fair market value (FMV) of your IRA each year as of December 31.

Don’t panic if you receive this form after filing. Form 5498 is sent out by May 31, after the tax season because IRA contributions can be made up to the tax deadline for the prior year. It is not needed to file your taxes, however you should keep it for your records.

When your money automatically rolled over to Millennium Trust it was a nontaxable event, so the 5498 is simply used to report to the IRS that your money moved directly from your former plan into an IRA. Making any allowable contributions to your IRA is also a nontaxable event.

View this video for more information about Form 5498.

What do I need to know about Required Minimum Distributions (RMDs)?

Individuals who turned 70½ in 2019 or earlier, were not required to take an RMD for 2020 due to the SECURE Act.  For 2021, however, such individuals were expected to have taken  an RMD by December 31, 2021. RMDs taken by December 31, 2021, will also be reported on your 1099-R.

If you turned 72 in 2021, your first RMD is due by April 1, 2022. Going forward, RMDs must be taken by December 31 of each year. For those who did turn 72 last year and delayed their first RMD into 2022, you will still need to take your 2022 RMD by December 31, 2022—both distributions will be reportable next year on your taxes for the 2022 tax year. For more insight into this, contact your tax professional.

Please note, that the tax code regarding the rules for RMDs changed in December 2019, raising the age of required distributions rising from 70 ½ to 72 effective January 1, 2020.

To help you manage your taxes each year and throughout the year, visit our Tax Center, which includes helpful resources, like videos, IRS tax forms, important tax dates, FAQs and more.

Tax Center

The material in this Blog is presented for informational purposes only. The information presented is not investment, legal, tax or compliance advice. Millennium Trust Company performs the duties of a directed custodian, and as such does not offer or sell investments or provide investment, legal, or tax advice.

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