When filing taxes, why do we have to tell them how much ROTH IRA we have?

[mrpaseo]

I did not take any out, why do I have to report the balance of my ROTH IRAs?

[humandraydel]

You don't have to. This link specifically says "You do not report Roth IRA contributions on your return" in the Introduction.

http://www.irs.gov/publications/p590/ch02.html

[rennigade]

Yeah I never report mine...its not necessary.

[creditcardfree]

You are asking about the balance at year end correct? The company holding your ROTH IRA will report the Year End Balance of your account on Form 5498. I would guess the IRS is matching what you report and what the company reports. Again...I'm guessing.

[mrpaseo]

Yes, year end totals, I find it odd that they ask us to report investments that are not taxed... It did not ask for my wife's ROTH (We are filing joint).

Odd.

Thanks.

[creditcardfree]

Well if you take out earnings from a Roth before 5 years, ect, then those will be taxed. Traditional IRA accounts have ALWAYS reported year end balances on a 5498, so I think it has to do with consistency. Not sure why your wife's Roth balance wouldn't also be reported. That seems like a tax program issue to me. I don't think there is a penalty for NOT reporting it. Haven't heard of it though.

[Like2Plan]

I did not take any out, why do I have to report the balance of my ROTH IRAs?

I'm not sure why they would ask for the balance. My tax software keeps track of my basis from year to year--It is after I answer a round of questions regarding my IRA.

[kork13]

I'm not sure why they would ask for the balance. My tax software keeps track of my basis from year to year--It is after I answer a round of questions regarding my IRA.

Likewise... I only report my annual contributions as the cost basis, which makes sense because it's the IRS that manages the contribution eligibility & maximums. I've never reported my balance.

[KTP]

I report IRA contributions on form 8606 but that is only to establish a basis in the IRA since I cannot make deductible contributions. This helps if/when you withdraw money or convert to a Roth.

[bjl584]

You don't need to. The only exception would be if you receive a K1 form for something that you own within the Roth. Then, you may owe taxes. The Roth won't shield you from this type of taxation. But even then, your overall balance shouldn't matter.

[bUU]

I view the disclosure as a convenience. When you withdraw, if there are any questions about the tax status of the money, for any reason, you either have to reconstruct the history of contributions and gains to prove your contention, or simply refer back to the history of disclosures on file with the IRS, which they did not contest. At least I hope that's how it works.

Regardless, we won't submit it every year. I plan to just deal with that occasionally - probably every third year or so.