From all the posts I found, it seems I don't need to enter my form 5498. But, at one of the item (please see the attached screenshot), turbotax asks "Tell Us the value of your traditional IRA", there are 3 boxes I need to enter:
1. Value of your traditional, SEP, and SIMPLE IRAs on December 31,2018.
2. Outstanding rollovers
3. Outstanding Recharacterizations
Do I need to enter those?
If I need to enter them, where can I find these on form 5498? (which boxes on the form 5498?)
Yes, you need to enter those. TurboTax asks for these in anticipation of needing to prepare Form 8606 if Form 8606 is required to be included with your tax return.
Since the regular due date of your tax return is before the deadline for IRA custodians to issue Forms 5498, these values are normally obtained from your year-end IRA statements and from your transaction statements showing distributions that were made near the end of the tax year but were deposited as rollovers or recharacterizations early the following year. The rollovers and recharacterizations for 2018 not deposited until 2019 will be reported on your 2019 Form 5498 that you won't receive until about a year from now, so you don't wait for that to file your 2018 tax return.
Whenever TurboTax asks you for the the year end value of your traditional IRAs TurboTax is asking for the sum of the values on December 31 of *all* traditional IRAs that you own. If TurboTax asks you for the the year end value of your Roth IRAs TurboTax is asking for the sum of the values on December 31 of all Roth IRAs that you own.
"Outstanding" rollovers are those where a distribution is made from a traditional IRA late in the year but the funds are not rolled back into a traditional IRA until early in the following year, causing the funds to be temporarily outside any IRA on December 31. Likewise for any recharacterizations. Your Forms 5498 will *not* show any outstanding rollovers or recharacterizations that need to be reported on this year's tax return, you'll need to get information on these outstanding transactions, if any, from your account records.
The reference to distributions made in 2017 makes no sense at all to me. I think it's wrong.
I entered the balance of my traditional IRA account as of Dec 31 ($10k in my example) and my tax liability went up significantly. Why does this happen? These are after tax dollars that were contributed over the years. There were no early disbursements, just a conversion of new contributions to a Roth during the year.
- Existing Traditional IRA balance Dec 31 2020: $10K
- New 2020 Traditional IRA contributions: $6K
- 2020 Conversions from Traditional to Roth: $6K