Where Does Form 5498 Go?

Where does the information on Form 5498 go in TurboTax? Here’s a quick guide:

Box 1, IRA Contributions: In the Deductions section, choose 10. IRA Contributions, then mark that you have a traditional IRA. Enter your total traditional IRA contributions for 2005… this amount will appear on line 1 of our IRA Contributions Worksheet.

Box 2, Rollover Contributions: these are entered in the Income section under 5. IRA & Pension Distributions. The important thing here is that, in most cases, you’ll also have received Form 1099-R from the Pension or 401(k) administrator that actually paid the money into your IRA. You enter the information from the 1099-R into TurboTax in this case, not the information from your Form 5498… if you have a 1099-R for your rollover, just disregard your Form 5498 box 2 entry.

Box 3, Roth IRA Conversion Amount: again, as with a rollover contribution, you’ll have received Form 1099-R from your IRA trustee showing a distribution from your traditional IRA to a Roth IRA. You’ll enter the 1099-R information in this case, just like above, and just disregard the Form 5498 entry.

Box 5, Fair Market Value: this is the only entry on Form 5498 for many people, and it’s only important when you took money out of your traditional IRA AND you had "tax basis" in your IRA accounts. "Tax basis" exists whenever you made contributions to that IRA with after-tax dollars… such as nondeductible IRA contributions or rollovers from non-tax deferred retirement savings plans. Most of the time, your IRA won’t have any tax basis, especially if you created it through a rollover from a 401(k) plan. In any case, the only time you’ll need this box 5 number is when you DO have a tax basis in your IRAs AND you took money out. This isn’t that common. If you do need to enter this number, you’ll be asked for it when you enter your Form 1099-R for your IRA distribution.

Box 10, Roth IRA Contributions: This goes in the Deductions section, under 10. IRA Contributions. You’ll check the Roth IRA box when asked what type of IRA, then you’ll enter this amount when TurboTax asks for your total Roth IRA contributions. The amount will appear on line 18 of the IRA Contributions Worksheet. These are NOT deductible! However, whether you can contribute is controlled by income limits… therefore, it’s important to enter this info into TurboTax.