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do i need to report traditional IRA contributions? or does my bank do it?
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yes. they are reported on the tax return for the year made.
What form/field do I fill out? What about ROTH IRAs- I believe these don’t need to be reported since they are not tax deductible
Enter your IRA contribution (traditional [TIRA] or Roth) in TurboTax (TT). If TT determines that you are eligible for a TIRA deduction, it will put it on line 19 of Schedule 1. It will not enter a Roth contribution on any IRS forms*, but will prepare a work sheet to help you track your contributions (both Roth & TIRA).
*If TT determines that you are eligible for the Retirement Savings Contributions Credit, it will prepare form 8880 to claim the credit. The credit goes on line 4 of Schedule 3. Both TIRA & Roth contributions are eligible for the credit.
The Retirement Savings Contributions Credit (“Saver’s credit”) is very limited and is for low income people. See the table on Form 8880: https://www.irs.gov/pub/irs-pdf/f8880.pdf
Added (edited): If you make a non-deductible TIRA contribution, TT will report that on form 8606, as part of your tax return. Your "bank" (IRA custodian) will also report all contributions on form 5498. Form 5498 is only an informational form and you do not report it on your tax return.
If you make a non-deductible Traditional IRA contribution, TT will report that on form 8606. Your "bank" (IRA custodian) will also report all contributions (Roth and TIRA) on form 5498. Form 5498 is an informational form and you do not report it on your tax return.
@Hal_Al Do we have to do anything with Roth IRA contributions? I'm just trying to make sure I don't get taxed twice, but I was doing research and it seems our bank will report the Roth IRA contributions we don't need to do anything on our end. is that correct?
Q. Do we have to do anything with Roth IRA contributions? We don't need to do anything on our end. is that correct?
A. Simple answer: that's correct. Nothing is reported about your Roth contribution on your tax return.
But taxes aren't simple. Although, in theory, you should never be taxed on the Roth IRA, you do need to keep track of your contributions ("basis"), just in case you make a premature withdrawal some time in the future. TurboTax will do that for you, but you have to enter your contributions. Also, as explained above, you may be eligible for the Savers credit.
Discussion on early withdrawals: https://www.investopedia.com/the-pros-and-cons-of-an-early-withdrawal-from-your-roth-ira-4770546
another reason to enter it in Turbotax is so that it can determine if the contribution was excessive. such excess must be withdrawn by the due date of the return or you'll owe a penalty Form 5329. If you don't enter it Turbotax can't do the computation but because the IRS is informed it will be able to determine if there is an excess and then bill you for the penalty
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