IRS Publication 590-A: Contributions to Individual Retirement Arrangements (IRAs)

DEFINITION of 'IRS Publication 590-A: Contributions to Individual Retirement Arrangements (IRAs)'

 

Publication 590-A is a document published by the Internal Revenue Service (IRS) pertaining to contributions to traditional and Roth Individual Retirement Accounts (IRAs), including SIMPLE IRAs and Simplified Employee Pension (SEP) IRAs. Prior to tax year 2014, Publication 590 was a single document that covered both contributions to – and distributions from – IRAs.

 

BREAKING DOWN 'IRS Publication 590-A: Contributions to Individual Retirement Arrangements (IRAs)'

IRS Publication 590-A is divided into four chapters. The first chapter deals exclusively with the contribution rules for traditional IRAs, including:

  • Who can open a traditional IRA
  • When a traditional IRA can be opened
  • How one can be opened
  • How much can be contributed
  • When contributions can be made
  • What amount of annual contributions can be deducted
  • Inheriting an IRA
  • Moving retirement plan assets
  • When you can withdraw or use traditional IRA assets
  • Which acts result in penalties or additional taxes

Chapter 2 of IRS Publication 590-A covers Roth IRAs, including a definition of what constitutes a Roth IRA, when a Roth can be opened, who can contribute to a Roth IRA, the annual contribution limit, and when you can move amounts into a Roth IRA. Chapter 3 discusses the Retirement Savings Contribution Credit, which is a tax credit available to qualifying taxpayers who contribute to a traditional or Roth IRA. Credits reduce your tax liability on a dollar-for-dollar basis. Chapter 4 includes information on how to get tax help.

An introductory section includes information that’s new for the current tax year. For example, if the IRS makes any adjustments to the modified adjusted gross income limits for traditional or Roth IRA contributions, that would be found here. This section would also include notification of recent rule changes, such as the IRS decision to limit rollovers from one IRA to another to one in any one-year period.

There are a number of worksheets included in IRS Publication 590-A. These worksheets have different purposes. For example, there’s one that’s designed to help you calculate your modified AGI for traditional and Roth IRA purposes. Another allows you to figure your reduced IRA contribution if you’re not eligible to contribute the full amount because of your income. A third is used to calculate the amount of excess contributions that must be returned to you if you exceed the annual contribution limit.

The appendix includes additional worksheets for recording traditional IRA contributions for the year, and computing the taxable portion of your Social Security benefits if you receive Social Security and take a traditional IRA deduction. A table included in the publication illustrates the various types of rollover transactions allowed between different retirement plans, including traditional, Roth, SEP and SIMPLE IRAs.