This Week’s Blog Is Written By Scott D. Heins, CFP®, IAG Chief Investment Officer
February 25, 2026

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No, this is not my PIN for my debit card. In case my children are reading this, it is not the code necessary to get past the parental controls on streaming services. It is also not my garage door code.

However, it is a well-kept secret that could help you minimize or avoid income taxes in the future.

Every year taxpayers are inundated with 1099s around tax time. They come in all sorts of flavors depending on their designated purpose — INT, DIV, B, MISC, R, Q, SSA, G, and 14 other less common forms.

You must wait for each one of these to be issued before you can file your taxes every year. If a wayward 1099 manages to avoid detection, you may be required to amend your tax return.

Then there is Form 5498. It doesn’t arrive in the January and February flurry. It arrives in May, well after the April 15 filing deadline has passed.

So what good is an IRS form that arrives at least 45 days AFTER you file your taxes?

It turns out this underappreciated form provides important documentation regarding your retirement accounts.

It arrives so late because taxpayers have the opportunity to contribute to their retirement accounts for the previous year up to the filing deadline (typically April 15). Once that window closes, custodians have the information they need to issue Form 5498.

Form 5498 documents your IRA and Roth IRA contributions for the year. While contributions to deductible traditional IRAs do appear on your tax return, this is the only IRS evidence you will ever have about your Roth IRA contributions.

This is important due to Roth IRAs’ unique withdrawal rules. Roth IRAs allow taxpayers to take their cumulative contributions out of their account at any age for any reason without paying income taxes. Your collection of Forms 5498 over the years are your official documentation of those Roth contributions.

Roth IRAs also have specific rules regarding Roth conversions. I will not bore you with all the details here, but be sure to ask your tax professional before implementing a Roth conversion. Your Form 5498s document how much you converted in what years to ensure you do not accidentally subject yourself to unnecessary income taxes and penalties.

Let’s say you performed a rollover of some sort during the previous year. Your Form 5498 documents how much the custodian received in rollovers. This is the proof you need if the IRS ever inquires whether you actually completed the rollover.

If you are subject to Required Minimum Distributions (RMDs), your 5498 provides your official account value as of December 31 of the previous year and tells the IRS what your RMD is for the current year. The IRS will use this information to verify that you fulfilled your RMDs.

For taxpayers who make nondeductible IRA contributions (often as part of a backdoor Roth IRA strategy), the combination of Form 5498 and Form 8606 are a dynamic team that document that you do not have to pay income taxes on contributions for which you did not take a tax deduction.

While Form 5498 is always late to the tax time party, be sure you retain it with your tax returns indefinitely for future reference. It could be exactly what you need to minimize your future taxes many years in the future.

Quote of the week: Voltaire: “A great many laws in a country, like many physicians, is a sign of malady.”

Securities offered through LPL Financial. Member FINRA/SIPC. Investment advice offered through IAG Wealth Partners, LLC, (IAG) a registered investment advisor and separate entity from LPL Financial.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results.

Any opinions are those of IAG and not necessarily those of LPL Financial. Expressions of opinion are as of this date and are subject to change without notice. This information is not intended as a solicitation or an offer to buy or sell any security referred to herein. No strategy assures success or protects against loss. Investing involves risk including loss of principal.

ART: 1070029
Photo Credit: iStock 2168863085