form 5498 Question

I made contributions to a 401k plan at work and put in 12K for the year. However my form 5498 shows that I have put in

11K. I called them up and they said that since they received the check from my company (for Dec 2005 contribution) in Jan 2006, that month was not included. does that sound right?

"NKaufman" wrote

While it may not *sound* right, it is. See the instructions for Form 5498.

The value is as-of December 31st, so any deposits that get made after that date won't show. If it's the deposits made during the year, those will include the December 04 deposit made in January 05 but not include the December 05 deposit made in January 06.

-- Paul A. Thomas, CPA Athens, Georgia

Yes. What doesn't sound right is getting a 5498, which is for reporting IRA contributions, for a 401(k) contribution. Group, is this some new requirement I missed?

-- Phil Marti Clarksburg, MD

I have found that "401K" has become the generic term for any form of pension/retirement plan by employees and sadly, most employers. Such as "Coke" is generic now for almost any fizzy drink. It's also used for SEP and SIMPLE contributions, and the employee could have either of those plans.

-- Paul A. Thomas, CPA Athens, Georgia

I'm afraid that it does not sound right.

If you look at boxes for IRA contributions, they state that the amount for 2005 till April 2006. So why would employee plan contributions i.e 401K be treated any differently? And since I have claimed deduction of 12K in my taxes and the 5498 reports 11K, does that not raise a flag?

My fault. It is a Simple-IRA and not a 401K. This is the first time I'm getting a Simple-IRA from any company and am used to thinking 401k when I think of retirement plans.

Because they are. There are a lot of differences between IRA's and 401K's, SEP's and SIMPLE's.

Actually, you shouldn't have taken a deduction on your tax return, as the 401K contributions are already accounted for through your W-2 (reduced taxable wages). And that (the W-2) is the driving force in play. If the W-2 said you defered $12,000, then that's all that matters.

-- Paul Thomas, CPA snipped-for-privacy@bellsouth.net

True. I was taking advantage of retirement tax credit and hence used the figure from my W2 for my contribution.