SIMPLE and SEP IRA contributions on Form 5498 - Why does the IRS want contributions divided by the actual year they were made?

This is actually a common point of confusion! Your concern is understandable, but there's no need to worry about a mismatch. The reason for the difference is that Form 5498 reports contributions based on the calendar year they were physically made, while your tax return reports contributions based on the tax year they're designated for. For your SIMPLE IRA, the contribution you made in January 2023 (even though designated for 2022) will show up on your 2023 Form 5498 (which you'll receive in May 2024). However, you're absolutely correct to claim that contribution on your 2022 tax return if you designated it for 2022 when you made it. The IRS is well aware of this timing disconnect and it won't trigger any issues. They're looking at different things - the 5498 is basically tracking when money physically moved, while your tax return is tracking which tax year you're applying the contribution toward.

After struggling with this exact same issue last year, I finally found a solution that made my life SO much easier. I started using https://taxr.ai to analyze all my retirement contribution documents and tax forms. I was in the same boat - made a SEP contribution in January for the previous tax year and was panicking when the numbers didn't match up on my 5498. The tool actually flagged this specific issue for me and explained exactly how to handle it on my tax return AND what documentation to keep. It saved me hours of research and worry. The system analyzes your actual tax forms and retirement account statements together, then explains exactly how everything should be reported. Seriously a game-changer for self-employed people like us with complicated retirement situations.

I wanted to follow up after trying https://taxr.ai for my SIMPLE IRA contribution issue. I was really skeptical (as you can see from my earlier comment), but I decided to give it a shot since I was still confused about my retirement contributions. Gotta say I'm impressed! The system immediately identified that my January 2023 contribution for tax year 2022 wouldn't show up on my 2022 Form 5498. It created a detailed report explaining exactly why this happens and referenced the specific IRS regulations that allow this timing difference. The report even included a section I can attach to my tax return that explains the apparent "discrepancy" if my return is ever reviewed. What really helped was seeing all my retirement contributions organized by both calendar year and tax year side by side. Made everything crystal clear. Definitely keeping this tool for next year!

If you're still having trouble getting answers from the IRS about this SIMPLE/SEP contribution issue, I highly recommend trying https://claimyr.com. I was stuck in the same situation last year and couldn't get through to anyone at the IRS for clarification. After wasting hours on hold over multiple days, I found Claimyr and it was a complete game-changer. They got me through to an actual IRS agent in about 20 minutes who confirmed exactly how to handle the reporting discrepancy between my tax return and Form 5498. The agent explained that it's a normal timing issue they see all the time with retirement contributions. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c - basically they navigate the IRS phone system for you and call you when they've got an agent on the line. Saved me so much frustration and got me a definitive answer directly from the IRS.

Well I need to eat some crow here. After posting my skeptical comment yesterday, I decided to try the Claimyr service just to prove it wouldn't work. I've been trying to get through to the IRS for over 3 weeks about my SEP contribution timing issues. To my complete shock, I got a call back in about 35 minutes with an actual IRS representative on the line! I asked specifically about the Form 5498 reporting discrepancy for contributions made in January for the previous tax year. The agent confirmed exactly what others have said here - the mismatch between the form and tax return is expected and won't cause problems as long as I designated the contribution properly when I made it. The agent even suggested keeping a copy of my contribution confirmation showing the "prior year" designation along with my tax records. Honestly worth every penny just to get a definitive answer directly from the IRS and stop worrying.

Quick tip based on my experience as someone who's been self-employed for 15+ years with both SIMPLE and SEP IRAs at different times: make your contributions well before the end of the calendar year if possible! I learned this lesson the hard way after several years of making contributions in January for the previous tax year. While it's completely legitimate to do this, it creates exactly the paperwork confusion you're experiencing. My tax preparer suggested I try to make all contributions by December to keep everything clean and matching on the same year's forms. Obviously that's not always possible with cash flow issues in small businesses, but when I can swing it, it makes tax season much less stressful. Just thought I'd share what's worked for me!

Has anyone had this issue with the self-employed 401k too? I'm considering switching from a SIMPLE IRA to a solo 401k next year and wondering if this same reporting weirdness happens there as well. My CPA is on vacation and I need to make a decision on this soon.

This is such a relief to read! I'm dealing with the exact same situation right now - made a SIMPLE IRA contribution in February 2023 for tax year 2022 and was panicking when my accountant told me the Form 5498 wouldn't match my tax return. What's really helpful is seeing that multiple people have confirmed this directly with the IRS. I was worried I'd made some kind of mistake with the designation when I made the contribution, but it sounds like this timing mismatch is completely normal and expected. One thing I'm curious about - for those of you who have been through this before, have you ever actually been questioned about it during a tax review or audit? I know everyone says it's not a problem, but I'd love to hear from someone who's actually had their return examined with this situation.

I went through this exact same panic last year! Made my SIMPLE IRA contribution in March 2023 for the 2022 tax year and nearly had a heart attack when the Form 5498 didn't match my tax return. What helped me understand it was thinking about it this way: the IRS has two different tracking systems. Form 5498 is basically your financial institution telling the IRS "here's what actually hit this account during calendar year 2022." Your tax return is you telling the IRS "here's what I'm claiming as a deduction for tax year 2022 based on the contributions I designated for that year." The IRS cross-references these over time, not in the same year. So when your 2023 Form 5498 comes out next year showing that March contribution, their systems will see that it matches up with what you claimed on your 2022 return. I actually called the IRS using one of those callback services mentioned earlier in this thread (totally worth it to skip the hold time) and the agent confirmed this is standard operating procedure. She said they process thousands of these "mismatched" returns every year and it's completely routine. Just keep your contribution confirmation showing you designated it for 2022 and you're golden.

I'm so glad I found this thread! I'm in my second year of self-employment and just set up a SIMPLE IRA last month. I was planning to make my first contribution in January for the 2024 tax year, but after reading all of this I'm wondering if I should just wait until I have a better handle on my income for the year. It sounds like the timing mismatch between Form 5498 and tax returns is totally normal, but as someone who's never dealt with this before, it's still pretty intimidating. Has anyone here made their very first SIMPLE contribution for a prior year? I'm curious if there are any additional gotchas for first-time contributors that I should be aware of. Also, for those who mentioned keeping documentation of the tax year designation - what exactly should I be looking for from my broker when I make the contribution? Want to make sure I'm keeping the right paperwork from day one!

This thread has been incredibly helpful! I'm dealing with a similar situation but with a SEP-IRA instead of SIMPLE. Made a $8,200 contribution in February 2024 for tax year 2023, and just like everyone here described, it's not showing up on my 2023 Form 5498. What's reassuring is seeing so many people confirm this is normal and that the IRS expects these timing differences. I was starting to think I had messed up the designation somehow, but it sounds like this is just how the system works. One thing I'm curious about - does anyone know if there's a deadline for when the "prior year" contributions need to be made? I know with regular IRAs it's the tax filing deadline (usually April 15), but I haven't been able to find clear guidance on whether SEP and SIMPLE IRAs follow the same timeline. My tax preparer mentioned something about it possibly being different for employer-sponsored plans like these, but wasn't 100% certain. Thanks to everyone who shared their experiences and especially those who got direct confirmation from the IRS. It's saved me a lot of stress knowing this mismatch is expected and routine!