rollover ira

[arnolddr]

I have client who rolled over 401k form her workplace during 2022, and form 5498 number 1 IRA contribution shows $4,000.00.

Even if she has rollover IRA, is it still possible to contribute to Traditional IRA  for 2022?

[abctax55]

Yes

[qbteachmt · Accepted solution]

"and form 5498 number 1 IRA contribution shows $4,000.00."

If you are describing Box 1, then there already is some contribution for that year.

If you see it in Box 2, then it is Rollover, not contribution as New Funds.

In any case, you need to know what the taxpayer qualifies for. Box 1 would be part of what they are allowed, as it reflects contributions already made for that tax year.

[arnolddr]

Thank you.

Client's Form 5498, 2022 IRA Contribution Information shows as below:

1. IRA contribution (other than amounts in boxes 2-4,8-10,13a and 14a) ----$4,000

5. Fair market value  ------ $5,204.38

7. IRA Type --- IRA

Client mentioned that she rolled over her 401k to IRA during 2022

and I am wondering if she still can contribute to Traditional IRA.

[arnolddr]

Thank you.

[abctax55]

Yes... as I've already said....

I guess I should CYA & say as long as your client qualifies to make a current year contribution.

[qbteachmt]

"1. IRA contribution (other than amounts in boxes 2-4,8-10,13a and 14a) ----$4,000"

What matters is Box 1 for the tax year you are asking about for making contribution. Your client's previous plan manager either reported the rollover incorrectly, or your client already made $4,000 in 2022 contributions.

Look at Box 7.

Perhaps this person has another 5498 that reflects the rollover? Because the one you described is reflecting new contributions already made for the year; not rollovers.

That doesn't mean they can't contribute more. You have to reduce their total eligibility by the $4,000 already made. Or, they need a corrected form that properly reflects the 401(k) $4,000 was Rollover Box 2.

Something here is not what you described. The taxpayer might need to get more info.