Advanced Underwriting Consultants

Question of the Day – March 28

Ask the Experts!

The professionals at Advanced Underwriting Consultants (AUC) answer the tax and technical questions posed by producers.  Here’s the question of the day.

Question:  My client intends to make a Roth IRA contribution for 2012.  Where does she report that contribution on her tax return?

Answer:  Nowhere.  Roth IRA contributions are not reported on the individual’s tax return.  The IRA custodian does report a taxpayer’s Roth IRA contributions as part of its Form 5498 reporting obligation.

Form 5498 is filed with the Internal Revenue Service and a copy is also sent to the person who owns the account. Form 5498 provides confirmation to the IRS of the amounts the taxpayer contribution to traditional and Roth IRAs.

The taxpayer is obligated to keep records of Roth IRA contributions on her own, to substantiate that her contributions were proper, and also to prepare for proper tax treatment of future distributions from the Roth.

Have a question for the professionals at AUC?  Feel welcome to submit it by email.  We may post your question and the answer as the question of the day.