Annual Reporting Requirements for IRAs and 401(k)s

They then use these amounts to set the year-end account fair market value. For self-directed accounts, fair market values are not readily available, and it becomes the IRA account owner’s responsibility to self-report their self-directed investment values so that their custodian can properly report them. The value of an account is important for a few reasons. First, the IRS requires it to be updated annually. Second, it is used to set required minimum distributions (RMDs) for those account holders over the age of 72 with Traditional IRAs
Some 401(k)s must report the value of the plan on Form 5500. For brokerage 401(k)s holding stocks, bonds and mutual funds, the values are automatically determined from the close of the market on December 31st each year. These amounts can be used for reporting the Form 5500. But self-directed accounts, fair market values are not readily available, and it becomes the 401(k) account owner’s responsibility to obtain their self-directed investment values. This value can be a best-guess estimate unless it is used to set required minimum distributions (RMDs) for those account holders over the age of 72 with Traditional 401(k) balances. Some 401(k)s must report the value of the plan on Form 5500. For brokerage 401(k)s holding stocks, bonds and mutual funds, the values are automatically determined from the close of the market on December 31st each year. These amounts can be used for reporting the Form 5500. But self-directed accounts, fair market values are not readily available, and it becomes the 401(k) account owner’s responsibility to obtain their self-directed investment values. This value can be a best-guess estimate unless it is used to set required minimum distributions (RMDs) for those account holders over the age of 72 with Traditional 401(k) balances.