Final Tax Time Tip: Triple Check Contributions and Forms 1099-R and 5498

Monday, April 16, 2012

By Beverly DeVeny, IRA Technical Expert

Follow Me on Twitter: @BevIRAEdSlott

Most tax returns are done, 1099-Rs have been received, 2011 contributions have been made, and 5498s will be out by the end of next month (May). What’s left to be done? Only the double (and triple) checking.

Did you make a contribution in 2012 for 2011? Double check now to be sure the IRA custodian coded it as a 2011 contribution. Also double check that it went into the correct account, IRA or Roth IRA, your account or your spouse’s account, IRA or non-IRA account. Now is the time to fix any mistakes, not next year.

Did you use the direct deposit of your tax refund to make your IRA contribution? Again, double check all of the items noted above. In addition, double check the amount of the contribution. IRS could adjust the amount if they adjust items on your return. Make sure you have not over-contributed to your IRA or that the contribution was for less than the amount you deducted on your return. Also, check the direct deposit to insure it is for the correct year.

When you receive your 5498, double check to be sure that all of your contributions or additions to your IRA are included on the form. Make sure they went to the right account. Check the year end account balance to be sure that it is in the ball park of what you expected it to be. Make sure you receive a 5498 for all IRA or Roth IRA accounts that received additional funds in 2011.

Don’t make the mistake of thinking that someone else is watching all of this for you. In many cases, your advisor will be tracking this for you, BUT mistakes do happen and they need to be fixed as soon as possible. This is your hard-earned money and no one can look out for it like you.
 

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