Form 5498-SA Meaning | What is Form 5498 SA Used for?

What is the 5498 SA Tax Form?

IRS Form 5498 (officially known as “IRA Contribution Information”) is a US tax form used to report transactions relating to Individual Retirement Accounts. Financial institutions (such as banks or brokerage firms) must file the form, not individual taxpayers.

Essential Information on Form 5498

Contributions: Report contributions to IRAS during the year, including Roth IRAS and traditional IRAS.
Rollovers: Reports rollovers into IRAS from other retirement accounts, such as 401(k)s or other IRAS.
Conversions: Documents the conversion from a Roth IRA to a traditional IRA.
Fair Market Value (FMV): Fair Market Value (FMV) or the value of an IRA at the end of the tax year.
Requirement Minimum Distributions (RMDS): Indicates whether individuals aged 73 and older will be required to take an RMD for the next tax year.

What is Form 5498-SA Used for?

Form 5498-SA can be used to report contributions made to Archer Health Savings Accounts, Medicare Advantage MSAS, and Health Savings Accounts. This form is different from Form 5498, which deals with IRAS. The financial institution or trust company that holds an HSA or MSA provides Form 5498 to the IRS and both account holders.

Critical Purposes of Form 5498-SA

Reporting Contributions:

This form includes both employer and employee contributions. The form includes contributions from both employers and employees.
This includes contributions made on behalf of the account owner by anyone else.

Rollovers:

This report identifies any transfers or rollovers from an HSA to an MSA.

Fair Market Value (FMV):

The form shows the HSA/MSA fair market value as of December 31, the year of taxation. The account holder must have this information to ensure that the balance of the account is reported correctly.

Informational Purposes for Tax Reporting:

The IRS and taxpayers can use Form 5498 to track their contributions, ensuring they stay within the annual limits established by law. Contribution limits may vary depending on the account holder’s age (catch-up contribution) or the type of plan.
This also allows taxpayers to determine if any contributions were overpaid. If excess contributions are not corrected by removing the excess amounts, penalties can be imposed.

When Do 5498 Forms Come Out?

The Form 5498 (including both the standard IRA-related Form 5498 and Form 5498 SA for Health Savings Accounts and Medical Savings Accounts, or MSAs) is issued according to the following timelines.

For Form 5498 (IRA Contribution Information)

Due Date for IRA Account Holders: Financial institutions or trustees that manage IRAS must provide Form 5498 to account holders by May 31 in the year following the tax year. Contributions made before the deadline for filing taxes (normally April 15) can be included in this timeline.
IRS Deadline for Form 5498: Financial institutions must file Form 5498 by May 31.

For Form 5498-SA (HSA, Archer MSA, or Medicare Advantage MSA)

Due Date for Account Holders. Trustees or custodians who manage HSAS, Archer MSAS, or Medicare Advantage MSAS are required to send Form 5498 to account holders no later than May 31 in the year following the fiscal year.
The IRS must receive Form 5498sa by May 31.

The deadlines provide sufficient time for account holders and institutions to accurately report all contributions made in the previous year, including those made up until the tax filing deadline.

Also See: Form 2553 | Form 1042-S | IRS Form SS-4 | Form 1040 ES | Form 1099 SA