IRS Publication 590: Individual Retirement Arrangements (IRAs)

Key takeaways
* Publication 590 explains federal tax rules for individual retirement arrangements (IRAs), including how to open, contribute to, and withdraw from IRAs.
* The publication is divided into two parts: Part A (contributions) and Part B (distributions).
* It covers traditional and Roth IRAs, contribution limits and eligibility, rollovers and transfers, required minimum distributions (RMDs), penalties, and special provisions (for example, disaster-related relief).

What Publication 590 covers

IRS Publication 590 is the official IRS guidance on IRAs. It defines the types of IRAs, describes tax treatment of contributions and distributions, and explains compliance rules, including penalties for violations. The guidance applies broadly to:
* Traditional IRAs and Roth IRAs
* Individual retirement annuities and certain trusts or custodial accounts
* Rules for opening and maintaining an IRA
* Contribution limits, timing, and tax-deduction rules
* Eligibility and adjusted gross income (AGI) limits for deductions and Roth contributions
* Rollover and transfer procedures between retirement plans and IRAs
* Distribution rules, including conversions, rollovers, and inherited IRAs
* Penalties and additional taxes triggered by prohibited transactions, excess contributions, early withdrawals, and missed RMDs

Parts A and B: Contributions vs. Distributions

Part A — Contributions: Explains who may contribute to an IRA, how much and when contributions can be made, and when contributions are deductible (for traditional IRAs). It also covers recharacterizations and rules for rollovers into IRAs.

Part B — Distributions: Covers taxable and nontaxable distributions, ordering rules (for Roth accounts), early withdrawal exceptions, required minimum distributions (for accounts subject to RMDs), inherited IRA rules, and reporting requirements.

Key differences between traditional and Roth IRAs

• Tax treatment: Traditional IRA contributions may be tax-deductible and distributions are generally taxable; Roth IRA contributions are made with after‑tax dollars and qualified distributions are tax-free.
• Eligibility and limits: Deductibility and ability to contribute to a Roth are subject to modified AGI limits and filing status considerations.
• Timing of tax benefits: Traditional IRAs provide an immediate tax benefit (if deductible); Roth IRAs provide tax-free growth and tax-free qualified withdrawals later.

Rollovers, transfers, and inherited IRAs

Publication 590 details procedures and timing for:
* Direct rollovers (trustee-to-trustee transfers) and indirect rollovers (60-day rollovers), including limits and exceptions
* Handling plan loan offsets and their rollover implications
* Rules for inherited IRAs, including distribution options and required timing for beneficiaries

Penalties and special relief provisions

The publication explains common penalties and additional taxes, such as:
* Excess contribution penalties
* Early withdrawal penalties (and exceptions)
* Taxes on prohibited transactions
* Penalties for missed RMDs

It also documents special relief measures that may apply in exceptional circumstances (for example, disaster-related distribution and repayment rules) and periodic updates to AGI limits and other thresholds.

How to use Publication 590

Use Publication 590 when you need authoritative guidance on:
* Determining whether you can contribute to or deduct contributions for a traditional or Roth IRA
* Understanding the tax consequences of conversions, rollovers, and distributions
* Calculating and meeting RMD requirements
* Resolving questions about inherited IRAs and beneficiary options
Refer to the specific sections for Part A (contributions) or Part B (distributions) depending on your issue.

Sources

Primary guidance comes from the Internal Revenue Service publications:
* Publication 590-A: Contributions to Individual Retirement Arrangements (IRAs)
* Publication 590-B: Distributions from Individual Retirement Arrangements (IRAs)