What is 'IRS Publication 590: Individual Retirement Arrangements (IRAs)'

IRS Publication 590: Individual Retirement Arrangements (IRAs) refers to an IRS document that outlines rules for individual retirement accounts (IRAs). The document, published by the Internal Revenue Service, provides information on how to set up an IRA, how to contribute to it, how much may be contributed, how to treat distributions and how to take tax deductions for contributions made to IRAs. IRS Publication 590 also provides information on penalties that taxpayers might face if IRA regulations are not followed properly.

Breaking Down 'IRS Publication 590: Individual Retirement Arrangements (IRAs)'

While IRS Publication 590 specifies "individual retirement arrangements," that term is meant to broadly represent a wide variety of individual retirement accounts, individual retirement annuities and other trusts or custodial accounts that acts as a personal savings plan that provides tax advantages for setting aside money for retirement. IRS Publication 590 has two parts. Part A covers contributions to individual retirement arrangements, and Part B covers discusses distributions from individual retirement arrangements. There are significant differences between the various retirement accounts covered in IRS Publication 590, including Roth IRAs and traditional IRAs, especially when it comes to the tax treatment of contributions. The publication covers:

  • Who can open a traditional IRA or Roth IRA
  • When a traditional IRA or a Roth IRA may be opened
  • The definition of a Roth IRA
  • How to open a traditional or Roth IRA
  • How much may be contributed
  • When contributions can be made
  • How much may be deducted
  • IRA inheritance rules
  • Moving of retirement assets
  • Asset withdrawal rules
  • Acts that trigger penalties or additional taxes

IRS Publication 590: Individual Retirement Arrangements: New Items

IRS Publication 590 often outlines new rules or provisions, such as those that offer relief to disaster victims. For example, in tax year 2017 it names a qualified disaster tax relief provision that covers "tax-favored withdrawals and repayments from certain retirement plans for taxpayers who suffered economic losses" as a result of Hurricane and Tropical Storm Harvey, as well as Hurricanes Irma and Maria, and the California wildfires.

Other new items for 2017 include:

  • New information for treatment of unrelated business income in an IRA;
  • A modified AGI limit for traditional IRA contributions;
  • A modified AGI limit for certain married individuals;
  • A modified AGI limit for Roth IRA contributions.

In 2018, there are increases to the AGI limits across the board, as well as an extended rollover period for certain plan loan offsets and a disclosure disallowing recharacterization of conversions made in 2018 or later.

There are significant differences between the various retirement accounts covered in IRS Publication 590, including Roth IRAs and traditional IRAs, especially when it comes to the tax treatment of contributions.

RELATED TERMS
  1. Traditional IRA

    An individual retirement account allows individuals to direct ...
  2. IRS Publication 590-B: Distribution ...

    IRS Publication 590-B outlines the rules for making distributions ...
  3. Backdoor Roth IRA

    A backdoor Roth IRA allows taxpayers to place retirement savings ...
  4. Qualified Distribution

    A qualified distribution is made from a Roth IRA and is tax and ...
  5. IRA Rollover

    An IRA rollover is a transfer of funds from a retirement account ...
  6. Guardian IRA

    A Guardian IRA is an Individual Retirement Account held in the ...
Related Articles
  1. Retirement

    Why a Roth IRA May Be the Better Choice

    Both traditional and Roth IRAs are good for funding retirement, but here's why the Roth is better.
  2. Retirement

    Is a Roth IRA or Traditional IRA Better For You?

    There are benefits to both types of IRAs, but it is important to determine which account will work best for you.
  3. Retirement

    Which Is Better, a Traditional IRA or Roth IRA?

    Traditional IRAs and Roth IRAs have different benefits, but both are great for retirement savings.
  4. Retirement

    Roth IRA or Traditional IRA: It Depends on You

    Deciding which type of IRA to use to save for retirement involves learning the differences between them and determining which is right for you.
  5. Retirement

    Tips On How To Use IRAs To Boost Retirement Savings

    According to the Trustees of the Social Security Fund, the fund will be depleted by 2037. Are you ready?
  6. Retirement

    11 Things You May Not Know About Your IRA

    These little-known features will help you get the most out of your retirement savings.
  7. Retirement

    The Top 3 Advantages Roth IRAs Offer

    Despite offering significant benefits Roth IRAs are often overlooked.
  8. Retirement

    The Most Tax-Effective Retirement Account

    Taxable accounts, traditional IRAs and Roth IRAs all have advantages and disadvantages.
  9. Retirement

    How a Roth IRA Works After Retirement

    What retirees need to know about taxes, distributions and passing on your unspent savings to the next generation.
Trading Center