TIAA-CREF Walks You Through IRS Form 5498 for IRA Contributions

February 13, 2006 -- We're providing the information below to assist you in understanding the Internal Revenue Service (IRS) Form(s) 5498 "IRA Contribution Information" we sent to you. TIAA-CREF cannot give tax advice. Therefore, use this notice together with professional tax advice to complete your income tax returns. This notice represents TIAA-CREF's understanding of the current federal tax laws and regulations.

Important Note -- As a result of modifications we are making to our record keeping, some participants may notice a change in the account number associated with the information supplied in boxes 1 through 11 of the Form 5498. If you have any questions concerning this tax form, please call the Telephone Counseling Center at 800 842-2776.

Your Tax Forms Are Now Available Online

You can view your tax information, including your 2005 tax reporting forms online. If you already have a log-in for account access, simply log in and go to "documents" to view your 2005 tax reporting forms. If you don't have a log-in, you can create a password and User ID by clicking on "Get a Log-in."

2006 REQUIRED MINIMUM DISTRIBUTION FROM YOUR IRA

If you attained 70½ years of age or older in 2005, federal law requires that you take a minimum distribution from your TIAA-CREF Traditional or Rollover IRA account(s) in the 2006 calendar year.  When you are taking your first payment in the calendar year after you turn 70½, two distributions are required for that year. The first payment must be taken by April 1, and the second by December 31. Your total annual required distribution must be withdrawn by December 31, 2006.

To request a calculation of the amount of your 2006 required minimum distribution, or any other questions regarding this tax form, please call the Telephone Counseling Center at 800 842-2776, Monday to Friday from 8 a.m. to 10 p.m. (ET) and Saturday from 9 a.m. to 6 p.m. (ET).

If you were at least 70½ years of age in 2005, box 11 of Form 5498 will indicate that you are required to take a minimum distribution from your IRA for calendar year 2006. This information will be reported to the IRS.

Additional Information Regarding Your Form 5498 can be obtained by reviewing the information included with your form 5498 or by visiting http://www.irs.gov/pub/irs-pdf/i1099r.pdf

Box 1 - IRA Contributions - Reports contributions (deductible and nondeductible) to a  Traditional IRA for the 2005 tax reporting year. If you contributed to your Traditional IRA between January 1 and December 31, 2005, you will receive Form 5498 by January 31, 2006. If you contribute to your Traditional IRA between January 1 and April 17, 2006, and you designate these contributions for the 2005 tax reporting year, you will receive a new or reissued Form 5498 by May 31, 2006. The Internal Revenue Service requires you to report nondeductible contributions on IRS Form 8606, "Nondeductible IRAs."

Box 2 - Rollover Contributions - The aggregated amount in this box may include:

  • Direct rollovers (for example, your rollover-eligible assets from another financial institution that are directly rolled over to a TIAA-CREF IRA).
  • 60-day rollovers (for example, you received a rollover-eligible cash distribution and remitted the funds to a TIAA-CREF IRA within 60 days from the distribution date). 

Box 3 - Roth IRA Conversion Amount - Reports the aggregated amount of funds converted from a Traditional or Rollover IRA to a Roth IRA. Please review your transaction confirmation statement(s) and quarterly statement(s) for detailed breakdowns of all transactions applicable to your IRA contract(s).

Box 4 - Recharacterization Contributions - Reports the aggregated amount of recharacterized contributions transferred to your IRA. Please review your transaction confirmation statement(s) and quarterly statement(s) for detailed breakdowns of all transactions applicable to your IRA contract(s).

Box 5 - Fair Market Value - Reports the fair market value (FMV), which is the total accumulation of an IRA contract as of December 31, 2005. If a decedent is shown as a participant, the executor or administrator of the decedent's estate may request the FMV as of the date of death.

Box 7 - IRA Type - The Traditional IRA or Roth IRA column will be checked to identify the type of IRA product reported.

Box 10 - Roth IRA Contributions - Reports contributions to a Roth IRA for the 2005 tax reporting year. If you contributed to your Roth IRA between January 1 and December 31, 2005, you will receive Form 5498 by January 31, 2006. If you contribute to your Roth IRA between January 1 and April 17, 2006, and you designate these contributions for the 2005 tax reporting year, you will receive a new or reissued Form 5498 by May 31, 2006.

Box 11 - Required Minimum Distribution - This box will be checked if you attained age 70½ in 2005 and you are required to take a minimum distribution in 2006 from your Traditional or Rollover IRA.

Frequently Asked Questions

Why did I receive a Form 5498?
Federal law requires TIAA-CREF to report contributions (deductible and nondeductible), conversions, recharacterizations, and rollovers you made in 2005 (and year 2005 contributions remitted between January 1 and April 17, 2006). These amounts are indicated on Form 5498. Form 5498 also reports the FMV of your IRA contract(s) as of December 31, 2005.

Why is there a check in box 11 of Form 5498?
This is to alert you to take a required minimum distribution (RMD) for 2006, if you attained age 70½ in 2005.

What are the IRA contribution limits?
Generally, contributions are based on earned income. Earned income includes all the taxable income and wages you received from working. In addition, a phased-out income level may further reduce the contribution limits. See IRS Pub. 590.

  • For tax years 2005 and 2006, the maximum contribution limit for each year is $4,000.  If you are age 50 or over, there is a "catch-up" provision for tax years 2005 and 2006.  The maximum contribution for the two years is $4,500 and $5,000, respectively.

I received a refund of an IRA Excess Contribution, but Form 5498 still reflects my entire contribution. Will I receive a revised Form 5498?
No. TIAA-CREF is required to report the entire contribution, including the excess contribution amount to the IRS. However, you will receive IRS Form 1099-R to reflect that your IRA Excess Contribution was refunded.

Do I have to attach Form 5498 to my income tax return?
No.  You are not required to do anything with Form 5498 because it is for informational purposes only.

How do I determine the basis of my IRA?
If this is your first year to contribute into an IRA, your basis begins with zero. Otherwise, enter the results from line 14 for Traditional IRA and the results from line 22 for Roth IRA of Form 8606 and adjust for:

  • Return of excess contribution,
  • Transfers or any distribution(s),
  • Recharacterization or conversion of IRA funds,
  • Rollovers of any nontaxable portion of your qualified employer plan.

Or simply use the FMV of your quarterly statement. See IRS Pub. 590.

How do I determine the nondeductible amount of my IRA?
File IRS Form 8606 to determine the taxable amount of a Traditional or Roth IRA. You are required to complete IRS Form 8606 if you:

  • Remitted nondeductible IRA contributions,
  • Converted IRA funds,
  • Recharacterized IRA funds,
  • Received a distribution(s) of nondeductible IRA funds,
  • Received a Roth IRA distribution(s) (qualified and nonqualified), and/or
  • Received first-time homebuyer distributions of up to $10,000 of the expenses from the Roth IRA contract.

How do I determine the taxable amount of my conversion?
IRS Form 8606 is used to determine the taxable amount due to a conversion. On Form 8606, you must enter the amount of the conversion, the original amount of any recharacterized funds, and your basis in the conversion. Your conversion and recharacterization confirmation statement(s) along with your quarterly statement(s) contain the information necessary to help you complete this form. Please see Part II of Form 8606 and its instructions for detailed directions.

Where can I find specific information regarding the Form 5498 included in this package?
The instructions included with the 2005 U.S. Individual Income Tax Return (IRS Form 1040 or 1040A) and IRS Publication 590, "Individual Retirement Arrangements (IRAs)," gives additional information on reporting requirements for your IRA. You may obtain this information by calling the IRS at 800 TAX-FORM, or visiting their Web site at www.irs.gov.

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