Considerations

• Traditional and rollover IRA amounts are separated since rollover contributions have already been deducted and cannot be deducted again. Traditional IRA contributions are deductible.
  
  

Conversions

• Any amounts converted from regular or rollover contributions into a Roth IRA are reported on the 5498. Form 8606 needs to be filed to determine the taxable amount of the converted funds.
  
  

Types

• SIMPLE and SEP IRA plans are designed to allow small businesses to establish qualified retirement plans for their employees without some of the requirements for traditional IRAs. Employer contributions are not deductible for the employee. Employees can make voluntary contributions from their earnings that are deductible.
  
  

Warning

• IRA rules require IRA owners to take required minimum distributions (RMDs) beginning at age 70 1/2. The goal of the RMD is to pay out the IRA during the owner's expected life span. Penalties for not taking RMDs are 50 percent excise tax of the RMD. Form 5498 reports these RMDs and alerts the owner to the need to take an RMD.