Form 5498-ESA is the document used to report the education savings account contributions or rollovers made throughout a given calendar year. Also known as the Coverdell ESA Contribution Information form, the 5498-ESA is filed for each person for whom an institution or organization has maintained a Coverdell education savings account (ESA).
There are several types of contributions that will catalyze the need to file Form 5498-ESA, including rollovers, transfers, and the addition of family members. If your place of work handles this type of account, you may be familiar with this specialized form.
The 5498-ESA form is often filed in bulk for a variety of account holders, which means accountants at financial institutions are typically handling hundreds of versions of the form at once. This points up the need for a robust database, easy data import options, and fast data entry. All of these are possible with tools from Advanced Micro Solutions (AMS).
What is a Coverdell ESA?
This education savings account is a trust or account created within the United States to be used exclusively for paying qualified education expenses of the designated beneficiary. This designation must happen at the time the account is created. Additionally, the governing body that creates the trust must meet certain requirements as put forward by Code 530(b)1. This includes:
- Banks
- Another person who demonstrates to the satisfaction of the Secretary that the trust is administered within the requirements
If you work in the accounting department of a financial institution, you may be familiar with this form.
More About Form 5498-ESA
There are a few important rules created to streamline Form 5498-ESA filing. In general, if a total distribution was made from an account during the tax year, and there were no contributions, you will not need to file Form 5498-ESA. However, if you are required to file this form, you must furnish a statement to the beneficiary by April 30. Additional rules and exceptions can be found in the Form 5498-ESA instruction guide.
Exceptions and regulations aside, Form 5498-ESA is very short. With a robust and up-to-date data set for each beneficiary (person for whom the form is filed), it should take just a couple of minutes to complete. That said, you also need to have a software tool that provides for a range of data import options. This is exactly the type of user-oriented experience AMS can provide.
A Software Solution for Form 5498-ESA
Our W-2/1099 Forms Filer software is an excellent option for accountants and businesses who need to file Form 5498-ESA. More than a tool for this specific form, this software provides support for every type of W-2, W-3, 1099, 1098, and 5498 form, allowing for multi-purpose uses within accounting businesses and departments. With a range of data import and export options, easy-to-use form facsimiles, and an intuitive interface, this tool is an asset to any business or institution. If you’re curious to see how it can work for you, download a free demo version of the software.