The IRS requires that IRA assets be held by a qualified custodian; an individual may not act as an IRA custodian.
The IRA custodian is also responsible for all recordkeeping and IRS reporting for the IRA. The custodian will track any contributions, rollovers and transfers made to the account – and assist you with that process as much as you need. They will also record any distributions that you take as well as any investments that you make through your IRA.
There are two required annual IRS filings (Form 1099 and 5498) that the custodian will provide to both you, the IRA holder, and to the IRS.
- Form1099 will show any distributions taken from your IRA.
- Form 5498 shows any contributions made to the account throughout the year, as well as the Fair Market Value of your account.