TurboTax asks info from form 5498 for the value of my traditional IRA

[minchingho]

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?)

[dmertz]

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.

[minchingho]

Thank you for your answer. I do find 5498 available for my accounts. Actually, I found a 5498 for my 401k rollover IRA, a 1099-R for my traditional IRA, and a 5498 for my Roth IRA. Does turbotax ask me to enter "box 5 fair market value of account" into "value" box on turbotax? Do I also need to include the value of my traditional IRA even it has  1099-R? For the outstanding rollover box on Turbotax, does it ask me to enter “box 2 rollover contributions” on my 5498? The terms on the form maybe different. Can you please tell me the box number on my 5498 if I didn't get it right?

Thank you.

[dmertz]

You can generally ignore the Form 5498 and get all of the necessary information from your account statements and transaction records.

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.

[minchingho]

Thanks. In "Tell Us the value of All Your Traditional IRA Accounts", based on my understanding, I need to sum up 1. total value all IRAs on dec.31. 2018, 2. contribution I will make in 2019 for 2018 (before 4/15/2019 I assume) 3. distribution made in 2017. For example, In 2017, I have 7500. In 2018, I did backdoor Roth IRA for 5500. My IRA has 2000 left. In 2019, before 4/15, I contribute 3000 to my IRA. My statement on 12/31/2018 is 2000. Does it mean I only need to enter 2000 + 3000?

[dmertz]

No, just the total of traditional IRA values on December 31, 2018.  In your example, enter $2,000.

[minchingho]

My last post is about a different step from my first post. This step is in the beginning of the IRA related question. Turbotax clearly said 1. total value of all IRA,  2. contribution in 2019 for 2018, 3. any distribution made in 2017. I thought 1 and 2 are clear to me. I did not get item 3, distribution in 2017. That's why I asked if I need to enter 2000+3000 at this particular step "Tell Us the value of All Your Traditional IRA Accounts".

[dmertz]

Oh, you are asking about the page where TurboTax asks this to determine your penalty for an excess traditional IRA contribution.  Yes, in this case you are to enter the sum of your 2018 year-end balance and any contributions made in 2019 for 2018, $5,000.

The reference to distributions made in 2017 makes no sense at all to me.  I think it's wrong.

[minchingho]

Thank you for your answer. I really appreciate all the information you shared with me.

[cannison]

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.

For example:

• Existing Traditional IRA balance Dec 31 2020: $10K
• New 2020 Traditional IRA contributions: $6K
• 2020 Conversions from Traditional to Roth: $6K 

[fanfare]

if you have several IRAs, you likely would not get a 5498 from all of them.

Therefore you have to look at your year end statements to get the total value of all IRAs.

[blevealeve]

Form 5498 gives you the total of ONLY the Roth IRAs you own, but it is IS asked for on the Traditional IRA details in the Turbo Tax Premier software when it says it ONLY wants the details for your Traditional IRA.  This is what is incorrect, it either wants one or the other but the wording says both in two separate statements.  I don't think this is the first year because it drives me nuts each time.  Only the tax forms are sent to the IRS, correct? so don't know why Turbo Tax would ask details about the Traditional IRA that the IRS won't have access to. 

[HopeS]

I am assuming you want to clarify whether or not Form 5498 is sent to the IRS.  If this is what you are asking yes, the information on Form 5498 is submitted to the IRS by the trustee or issuer of your individual retirement arrangement (IRA) to report contributions, including any catch-up contributions, required minimum distributions (RMDs), and the fair market value (FMV) of the account. Contributions for all types of IRAs—Roth, traditional, SEP, and SIMPLE—are reported on Form 5498.

If you are being asked to enter the FMV for your Traditional IRAs, you would enter the total FMV for all Traditional IRAs even if you did not have a 5498 for all accounts.

If you never had any non-deductible contributions to any of your Traditional IRAs, but you are still being asked to provide the total FMV of those accounts, the number you enter will not affect the tax calculation or be reported on Form 8606.

Here is additional information on Form 5498:

Form 5498

 @blevealeve 

[Chris Aliprandi]

Your tax liability goes up because you had some positive tax basis in your IRA from prior years, and when you enter the value of your IRA as of prior year, form 8606 does a calculation to determine what portion of the current year's distribution/ conversion is non taxable.  Before you enter the prior year end value, turbotax is assuming that you the entire amount is non taxable.  After you enter it, turbotax accurately calculates the non taxable portion.