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IRS Forms You May Need

by Craig Moser on November 17, 2017


Have you ever wondered how the IRS receives all that financial information?  The short answer is forms.  Lots and lots of IRS forms!  According to Reference.com, the IRS website contained 896 different tax forms in 2015.  And while the data is a little dated, it does show there are a lot of different tax forms floating around out there.  Now think about the number of individual taxpayers, financial institutions, corporations, small businesses, non-profit organizations, and educational institutions that submit forms.

 

IRS Forms

Most of us are aware of the more common IRS forms individuals use to report information.  But there are also numerous forms for different types of businesses and financial transactions.  Here’s a quick list of some lesser-known forms the IRS uses to help keep everything in agreement.

 

RMDs

Each year, your investment account custodians (Fidelity, BlackRock, etc.) file Form 5498.  If Box 11 is checked on that form, you’re required to take RMDs.

 

Tax-free IRA Distribution

If part of your IRA distribution is tax-free, you have to let the IRS know.  You can do this by keeping your IRA basis information up-to-date using Form 8606.

 

Qualified Charitable Distribution (QCD)

If you make a qualified charitable distribution (QCD), you have to let the IRS know.  This is done on lines 15a and 15b of your Form 1040.  Line 15a lists the gross amount of your QCD and the amount not included in the QCD is on line 15b.  You can explain the difference between the two lines by writing “QCD” next to line 15b.

 

Contributing Too Much to an IRA or Roth IRA

In the past, the IRS has admittedly been poor at tracking this.  In fact, several Treasury Inspector General for Tax Administration (TIGTA) reports have noted the IRs hasn’t done a good job with compliance in this area.  Form 5498 reports information about your IRA and/or Roth IRA contributions, and with technology getting better, the IRS should be able to better determine if you’re over the limit.

My Trust Qualifies as a See-Through Trust

This one will probably only come up on an audit.  There isn’t a requirement to send the IRS a copy of our trust.  Even if you did, they probably wouldn’t have the technology to review it anyway.

 

Elapsed Time Since I Received my IRA Distribution

The 60-day rollover clock starts once you “receive” an IRA distribution.  This is largely an honesty-based system, but if your distribution arrives electronically or with a tracking number, the IRS can determine when you received it.  There isn’t a Form to track this one, so it’s largely an honesty-based system.

 

My First Roth IRA

When you want to show your Roth IRA distributions are qualified, it’s important to know how long it’s been since your first Roth IRA.  There isn’t a specific Form for this, and you don’t report the information on your tax return.  However, you might consider keeping a copy of your first Roth IRA Form 5498 or the statement showing your first contribution indefinitely.  If the IRS should ever question the tax-free nature of your distributions, this is the best way of backing up your claims.

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