IRS Releases 2018 IRA Reporting Instructions and Form 5498
The IRS has released the 2018 tax year Form 5498, IRA Contribution Information, the separate 2018 Instructions for Forms 1099-R and 5498, and an updated version of the 2018 General Instructions for Certain Information Returns. The 2018 Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc., had not been released at the time of this writing.
Form 5498 is used by IRA custodians, trustees and issuers to report IRA contributions, rollovers, conversions, recharacterizations, fair market value, and other IRA contribution-related information. In addition to date and deadline changes, this 2018 version was updated with changes to Box 13a, now titled “Postponed/late contrib.” The form instructions indicate the following changes for Box 13c, Code. Both revisions were a result of changes made by the Tax Cuts and Jobs Act of 2017.
- Code PL115-97 for the Sinai Peninsula of Egypt is added to report late contributions made by individuals who serve in this qualified hazardous duty area.
- Code PO is a new code to use for retirement plan participants who make rollovers of qualified retirement plan loan offsets.
Instructions for Forms 1099-R and 5498
The Instructions for Forms 1099-R and 5498 provide more extensive, detailed information about completing Forms 1099-R and 5498. The following updates in the 2018 Instructions are changes from the 2017 Instructions.
- Recharacterizing 2018 or later tax year Roth IRA conversions, or 2018 or later tax year retirement plan-to-Roth IRA rollovers is not allowed.
- Special rules apply for victims of 2016 and 2017 natural disasters.
- New Form 1099-R reporting code M, Qualified plan loan offset, is to be used for a qualified plan loan offset distribution due to severance from employment or termination of a plan. The code may be used with codes 1, 2, 4, 7, B.
- New Form 5498 reporting code PO is to be used for a rollover of a qualified plan loan offset amount.
- Special reporting for U.S. Armed Forces in designated combat zones has been added for the Sinai Peninsula of Egypt.
General Instructions for Certain Information Returns
The 2018 General Instructions for Certain Information Returns was first released in late January, but was updated further and rereleased on July 5. The General Instructions are updated every year for dates, limitations, and IRS penalties for incorrect reporting. Also see the “What’s New” section for additional revisions.
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