5498 Tax Reporting Frequently Asked Questions (FAQs) for Tax Reporting Service Clients

Transcription

1 5498 Tax Reporting Frequently Asked Questions (FAQs) for Tax Reporting Service Clients Below are common questions and answers regarding 2016 tax reporting for the IRS Form 5498 series. Q. When is the tax return deadline? A. Because the normal April 15 deadline falls on a Saturday and Emancipation Day is observed the following business day, the 2016 tax return deadline is April 18, Q. What are my reporting options? A. Your selected reporting option is the method you use to provide Ascensus with tax reporting information for tax year Take the steps below to confirm your reporting options. 1. Click your financial organization s name in the upper right corner of the IRAdirect homepage. 2. Click the Reporting tab. 3. Review the elections for 5498, 5498-ESA, and 5498-SA reporting listed in the Reporting Options column. Either Online or Transmission will be listed for each type of reporting. If you report 5498, 5498-ESA, or 5498-SA information using the Transmission option, you will also see a new section on the Reporting tab that reads, Contributions Applied from File to IRAdirect. The section indicates if your organization is currently set up to have all contributions or only regular contributions applied to IRAdirect from your submitted 5498 file. If only regular contributions are read from your organization s 5498 file, then only regular, SEP, and SIMPLE IRA contributions will be applied from your file and any rollover, recharacterization, and Roth IRA conversion contributions will only be reported if your organization adds those contribution types to an account owner s tree in IRAdirect. If only regular contributions are read from your organization s 5498-ESA file, then any rollover or direct transfer contributions will only be reported if your organization adds those contribution types to an account owner s tree in IRAdirect. If changes need to be made to the current settings, an Advanced User may do so on April 19, 2017, or later, under the Upload Tax Files link before submitting your organization s 5498 file. NOTE: For 5498-SA files, Ascensus will always read all contribution types listed in your file. This setting cannot be changed. Q. What do the reporting options mean? If the reporting option is Online, what is required? If I see Transmission for a reporting option, what should I do? A. The Online option means that your financial organization must complete the applicable report wizards in IRAdirect. As applicable, the following report wizard links will appear in the Reports and Queues section of the IRAdirect homepage. You must confirm, enter, or change information in the report wizards and submit the entries by the applicable deadlines. Follow the instructions listed in the applicable report wizard. ESA Contribution Report Wizard (available April 19, 2017) IRA FMV and Contribution Report Wizard (available April 19, 2017) HSA FMV and Contribution Report Wizard (available April 19, 2017) 1

2 The Transmission option means that your IT department or external data processor must transmit a file to us with the applicable information. Beginning April 19, 2017, files should be uploaded through the Upload Tax Files link in the Tax Reporting section of the IRAdirect homepage. New Process for Transmission Clients Acknowledge Contribution Types Applied from File When submitting an ESA, IRA, or HSA FMV/contribution file under the Upload Tax Files link, you now must confirm that you acknowledge and understand the specific contribution types that will be applied to IRAdirect from your submitted file by taking the following steps. 1. Click the FMVs/Contributions for IRAs (5498), ESAs (5498-ESA), and/or HSAs (5498-SA) radio button to submit an ESA, IRA, or HSA FMV/contribution file. 2. Click the View/Change Contribution Settings button to view the current contribution types that will be read from your file. 3. Read the instructions provided in the pop-up box to ensure you understand the contribution types that are read from your file, and make changes to the current settings, if necessary. (Changes cannot be made to the 5498-SA contribution settings.) 4. Click the Save button to save any changes made to your settings, or click Cancel to return to the Upload Tax Files page. 5. Check the box that indicates you confirm and understand that the contribution types selected under the View/Change Contribution Settings button will be applied to IRAdirect from your submitted file. (You cannot upload a tax file until this box is checked.) 6. Continue uploading your file by completing the remaining steps on the Upload Tax Files page. Q. If my reporting option is Transmission, what type of file do I send? A. All tax reporting files must be in IRS 750 Format, with exactly 750 characters per row, no more or less. The requirements for IRS 750 Format are in IRS Publication 1220, available at Make sure the correct tax year is indicated in the file (tax year 2016), and that the file is not indicated as a test file (T record position 28 should not contain the letter T ). If your file includes an extension, only the following file extensions are accepted:.dat,.txt,.2016,.1099,.irs, and.tape. If your file is formatted incorrectly, or an error occurs that delays processing because manual intervention is required to apply the tax data, your organization may be charged a $100 Ascensus Processing Issue Fee. Follow the steps below to access additional information regarding the Ascensus transmission requirements. 1. Click the Upload Tax Files link in the Tax Reporting section of the IRAdirect homepage. 2. Click the Transmission Requirements for Clients link in the Learn More box in the upper right corner of the screen. 2

3 Q. How do I know if you received my Transmission file? A. When you upload your Transmission file through the Upload Tax Files link, you can enter an address to receive a confirmation . Once we receive your tax reporting file, we will send a confirmation to the address listed in this field. When we successfully process your tax reporting file, we will send a confirmation to your financial organization s Primary Contact in IRAdirect if that individual is registered to receive our notifications. The received and processed dates will also be listed under the Reporting tab in IRAdirect under the Date Information Received and Date Information Processed columns. Allow Ascensus 72 hours to process your file after submitting it through the Upload Tax Files link. Please wait to contact Ascensus regarding the status of your file until the 72 hours have passed. If your file is not successfully processed after 72 hours, and you do not receive an from Ascensus regarding any processing errors, then please contact Ascensus for assistance. Q. If our IRAdirect Primary Contact is not registered to receive notifications, how do we sign up for that service? A. Take the following steps. 1. Click your financial organization s name in the upper right corner of the IRAdirect homepage. 2. Click the Contacts tab. The screen will automatically display the listing for your organization s Primary Contact. 3. Enter a valid address in the Address field, or confirm that the listed address is correct. 4. Check the Send notifications to this contact check box. 5. Click the Save button. Q. What are the deadlines for reporting 2016 tax information for Forms 5498-ESA, 5498, and 5498-SA to Ascensus? A. The tax reporting deadlines are outlined in the table below. Reporting Type Reporting Option Due Date 5498-ESA Transmission or Online April 21, Transmission or Online May 9, SA Transmission or Online May 9,

4 Q. When will our tax forms be produced? A. The first tax form productions will occur before business hours as indicated below. Thereafter, tax forms will be produced before business hours every Tuesday, Thursday, and Friday morning. April 25, 2017 (IRS Forms 5498-ESA for all CID numbers) Because of the tight turnaround this year, only forms in this production run are guaranteed to meet the IRS deadline May 12, 2017 (IRS Forms 5498-SA for all CID numbers and Forms 5498 for CID numbers ) May 16, 2017 (Forms 5498 for CID numbers ) May 18, 2017 (Forms 5498 for CID numbers ) Q. A red message on the IRAdirect homepage says that I have errors. What does this mean? A. These red messages alert you to problems that were encountered when your file (transmission) was processed. This message may only appear for clients that submit tax information using the Transmission reporting option. The transactions for the account owners listed in the Tax Reporting Error Queue must be corrected before the applicable tax reporting can occur. When you see an error message, take the following steps to access the Tax Reporting Error Queue. 1. Click the Tax Reporting Error Queue link in the Tax Reporting section of the IRAdirect homepage. 2. Correct the errors listed in the Error Queue by following the instructions listed in the Error Queue User Guide, which will be located in the upper left corner of the Error Queue screen. Q. How do I make a correction if I notice an error on an account owner s tax form after 2016 tax information has been applied to IRAdirect (either through the online report wizards or from a transmission file), but before the tax form has been produced? A. Corrections can be made by an Advanced User on the account owner s tree in IRAdirect. Follow the applicable steps below based on whether you re correcting FMV or contribution information. Correcting FMVs before 5498s are produced 1. Search for the account owner in the upper left corner of the IRAdirect homepage. 2. Click the 12/31/2016 FMV Amt link under the account owner s account that needs to be corrected. 3. Enter the correct FMV amount in the 12/31/2016 FMV field under the Current Balances section and click the Save button. Correcting contribution information before 5498s are produced 1. Search for the account owner in the upper left corner of the IRAdirect homepage. 2. Click the RU-12/31/2016 Contribution link under the account owner s account that needs to be corrected. 3. Enter the corrected amounts in the applicable fields and click the Save button. If the contribution type on the existing RU-Contribution is incorrect, take the following steps. 1. Click the RU-12/31/2016 Contribution link under the account owner s account that needs to be corrected. 2. Enter 0.00 in all of the amount fields and click the Save button. 3. Add a new contribution to the account owner s tree using the correct contribution type. 4

5 Q. How do I make a correction if I notice an error on an account owner s tax form after it has been produced? A. Each time tax forms are produced for your financial organization, an applicable Information Report will be available in IRAdirect. Each report documents the information on the tax forms produced in that run, and is accompanied by report instructions. You should review the report, and if corrections are needed for an owner s tax form, enter the changes in IRAdirect as outlined in the report instructions. A corrected tax form will be produced for the owner in the next tax form production run, and it will be documented in the subsequent Information Report. To access the information reports and instructions, take the steps listed below. 1. Click the Reports link in the Reports and Queues section of the IRAdirect homepage. 2. Click the applicable report you wish to view. Current Tax Year 5498 Information Report Current Tax Year 5498-ESA Information Report Current Tax Year 5498-SA Information Report Q. How can I see the information reported on each tax form produced for our financial organization? A. Each time we produce original or corrected tax forms for your organization, the applicable Information Report will be available in IRAdirect following that run through the Reports link on the homepage. Follow the steps listed in the preceding question to pull an applicable Information Report. Q. How can I confirm that tax forms were produced? A. If you submitted the information by our deadline, your forms will be produced in the first production of forms for that type. (Refer to the information on page 4.) After that production date, take these steps to confirm that your forms were produced. 1. Click your financial organization s name in the upper right corner of the IRAdirect homepage. 2. Click the Summary tab. 3. Navigate to the 2016 Tax Forms Produced section. If you see a figure greater than zero in the Paper or Electronic columns for the specific form type, then those tax form types have been produced. To view the number of tax forms produced on a specific date, take the following steps. 1. Click the Reports link in the Reports and Queues section of the IRAdirect homepage. 2. Click the applicable Information Report for the tax form production dates you wish to view. 3. Select a specific date range from the Printed Date From and Printed Date To drop-down menus to view the number of tax forms produced on those dates. 4. Click the Generate Report button to produce the report. The date the tax form was produced will be listed in the Account Type/Form Type/Date Produced column. Q. How do I determine the total numbers of each form type sent out to date? A. Follow the first set of steps listed in the preceding question. 5

6 Q. If I have further questions regarding tax reporting, is there someone I can contact? A. Yes. Please contact IRA Processing at from 8:00 a.m. to 5:00 p.m. Central Time, Monday through Friday, for assistance with any tax reporting questions. Ascensus and the Ascensus logo are registered trademarks of Ascensus, Inc. IRAdirect is a registered trademark of Ascensus, Inc. Copyright 2017 Ascensus, Inc. All Rights Reserved. 6