Tax Season Is Here: What Are Form 1099-R and Form 5498?

February 22, 2019
By Millennium Trust
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Tax season is in full swing, and even though it comes around every year, it can cause some confusion and be a daunting task for many people.

To make the process as painless as possible, you’ll want to file your return early, and also understand the forms you are receiving and why you are receiving them.

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

Will I receive Form 1099-R?

The 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 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.

Will I receive Form 5498?

Form 5498 is used to report contributions, including rollovers, made to an IRA for the current tax year. You will receive a 5498 if:

  • Your qualified retirement plan was automatically rolled over to an IRA for you at Millennium Trust and/or you made any other contributions in 2018.

This form may also be used to report the fair market value (FMV) of your IRA as of December 31.

And remember, don’t panic! This form is sent out after tax season (by May 31) but is not needed to file your taxes, so there’s no need to be alarmed when you don’t have it prior to the tax filing deadline. You should, however, still keep this form for your records.

Your IRA automatically rolling over to Millennium Trust is 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 if I turned 70½ and have a Required Minimum Distribution (RMD)?

If you turned 70½ in the reported tax year and took your RMD by December 31, this distribution would be reported on your 1099-R.

If you turned 70½ in the reported tax year and have waited to take your first RMD, you can still take it up until April 1, but you would not receive the 1099-R until the following tax year.

If you’ve elected to wait, just remember, you will have two RMDs to report for the following year’s taxes. Also remember, after the first year, you must take all RMDs before December 31.

View the Tax Reporting Summary to learn more. Keep in mind, you should speak to your tax professional for specific information regarding your tax situation.

As our clients’ ally, we are always working to ease the burden for you come tax season. This is why we’ve created 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. Millennium Trust Company performs the duties of a directed custodian, and as such does not sell investments or provide investment, legal or tax advice.

 

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