Deep Dive: IRS Publication 590 Explained — The Complete Guide to Retirement Account Rules for 2026
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Key Takeaways
IRS Publication 590 is split into two parts: 590-A (contributions) and 590-B (distributions), covering all rules for Traditional and Roth IRAs.
The 2026 IRA contribution limit is $7,000 ($8,000 for those aged 50+), with income-based phase-outs for Traditional IRA deductibility and Roth IRA eligibility.
Required minimum distributions from Traditional IRAs begin at age 73 (increasing to 75 in 2033), with a 25% penalty for missed distributions.
The backdoor Roth IRA strategy allows high-income earners to access Roth benefits, but the pro-rata rule makes it complex for anyone with existing Traditional IRA balances.
Roth IRAs have no required minimum distributions during the owner's lifetime, making them a powerful estate planning tool.
IRS Publication 590 is the definitive guide to Individual Retirement Arrangements (IRAs), covering everything from contribution limits and eligibility rules to distribution requirements and tax treatment. Split into two parts — Publication 590-A (contributions) and Publication 590-B (distributions) — it is the single most important tax document for the roughly 70 million Americans who hold IRA accounts.
For the 2026 tax year, several key thresholds have changed. Traditional and Roth IRA contribution limits remain at $7,000 ($8,000 for those aged 50 and over), but income phase-out ranges for deductibility and Roth eligibility have been adjusted upward for inflation. Understanding these rules can mean the difference between maximising your retirement tax benefits and leaving money on the table.
Whether you are deciding between a Traditional IRA and a Roth IRA, planning required minimum distributions in retirement, or considering a backdoor Roth conversion, Publication 590 provides the authoritative rules. This guide distills the essential information investors need to know.
Publication 590-A: IRA Contribution Rules for 2026
2026 IRA Contribution Limits
Publication 590-B: Distribution Rules and Required Minimum Distributions
Traditional IRA vs. Roth IRA: Tax Treatment Under Publication 590
IRA Rollovers, Conversions, and the Pro-Rata Rule
Common Mistakes and How Publication 590 Helps Avoid Them
Conclusion
IRS Publication 590 may not be light reading, but the rules it contains directly affect the retirement savings of roughly 70 million Americans. The key decisions it governs — Traditional vs. Roth contributions, conversion timing, RMD planning, and beneficiary designations — can mean tens or even hundreds of thousands of dollars in tax savings over a lifetime.
For 2026, the headline numbers remain the same as 2025: $7,000 contribution limit ($8,000 with catch-up), with income-based phase-outs for deductibility and Roth eligibility adjusted for inflation. The SECURE 2.0 Act's gradual increase of the RMD age to 73 (and eventually 75) gives investors more time to execute Roth conversion strategies before mandatory distributions begin.
Whether you are just starting to save for retirement or planning distributions, Publication 590 is the authoritative source. The strategies described here — maximising deductible contributions, executing backdoor Roth conversions, and timing Roth conversions in low-income years — are all built on rules explicitly defined in this publication. Consult a qualified tax professional for advice tailored to your specific situation, as individual circumstances vary widely.
Disclaimer: This content is AI-generated for informational purposes only and does not constitute financial advice. Consult qualified professionals before making investment decisions.
Publication 590-A covers everything related to contributing to an IRA. The fundamental rules for 2026 are:
Contribution limits: The maximum IRA contribution for 2026 is $7,000, or $8,000 if you are aged 50 or older (the additional $1,000 is a catch-up contribution). This limit applies across all your Traditional and Roth IRAs combined — you cannot contribute $7,000 to a Traditional IRA and another $7,000 to a Roth IRA in the same year.
Earned income requirement: You must have earned income (wages, self-employment income, or alimony received under pre-2019 divorce agreements) at least equal to your contribution. Investment income, rental income, and Social Security benefits do not count as earned income for IRA contribution purposes.
Age restrictions: There is no longer an age limit for Traditional IRA contributions — the SECURE Act of 2019 eliminated the previous age 70½ cutoff. You can contribute to a Traditional IRA at any age as long as you have earned income.
Traditional IRA deductibility: If neither you nor your spouse is covered by an employer retirement plan (such as a 401(k)), your Traditional IRA contributions are fully tax-deductible regardless of income. If you are covered by an employer plan, the deduction phases out based on modified adjusted gross income (MAGI). For 2026, the phase-out range for single filers covered by an employer plan is $79,000–$89,000; for married filing jointly, it is $126,000–$146,000.
Roth IRA eligibility: Roth IRA contributions are never tax-deductible, but qualified withdrawals are tax-free. For 2026, you can make a full Roth IRA contribution if your MAGI is below $150,000 (single) or $236,000 (married filing jointly). The contribution is completely phased out above $165,000 (single) or $246,000 (married filing jointly).
Publication 590-B covers the rules for taking money out of IRAs — including the critical required minimum distribution (RMD) rules that apply once you reach a certain age.
Early withdrawal penalty: Distributions from a Traditional IRA before age 59½ are generally subject to a 10% early withdrawal penalty in addition to ordinary income tax. However, Publication 590-B lists numerous exceptions, including:
Required Minimum Distributions (RMDs): Under the SECURE 2.0 Act, you must begin taking RMDs from Traditional IRAs by April 1 of the year following the year you turn 73. Beginning in 2033, this age threshold increases to 75. Roth IRAs are not subject to RMDs during the owner's lifetime — a significant advantage for estate planning.
The RMD amount is calculated by dividing your IRA balance as of December 31 of the prior year by a life expectancy factor from the IRS Uniform Lifetime Table. For example, a 73-year-old with a $500,000 Traditional IRA balance would have an RMD of approximately $18,868 ($500,000 ÷ 26.5 life expectancy factor).
Roth IRA distributions: Qualified distributions from Roth IRAs are completely tax-free and penalty-free. To qualify, the account must have been open for at least five years, and you must be at least 59½, disabled, or using up to $10,000 for a first home purchase. Contributions (not earnings) can always be withdrawn tax-free and penalty-free at any time, since they were made with after-tax dollars.
The central question in IRA planning is whether to contribute to a Traditional or Roth IRA. Publication 590 defines the distinct tax treatment of each, which drives the decision:
Traditional IRA tax treatment:
Contributions may be tax-deductible (reducing current-year taxable income)
All earnings grow tax-deferred
Withdrawals in retirement are taxed as ordinary income
RMDs are required starting at age 73 (75 beginning in 2033)
Best suited for investors who expect to be in a lower tax bracket in retirement
Roth IRA tax treatment:
Contributions are never tax-deductible (made with after-tax dollars)
All earnings grow tax-free
Qualified withdrawals are completely tax-free
No RMDs during the owner's lifetime
Best suited for investors who expect to be in the same or higher tax bracket in retirement
The key insight: With the federal funds rate at 3.64% and falling, the present value of tax deductions taken today versus tax-free withdrawals decades from now depends heavily on your assumed discount rate and future tax bracket. For younger investors in lower tax brackets with decades of compound growth ahead, the Roth IRA's tax-free withdrawals are typically more valuable. For higher-income earners nearing retirement, the Traditional IRA's immediate tax deduction may provide more benefit.
Backdoor Roth IRA: High-income earners who exceed Roth IRA income limits can use the "backdoor" strategy described in IRS guidance: contribute to a non-deductible Traditional IRA, then convert to a Roth IRA. This is legal and explicitly addressed in Publication 590, though the pro-rata rule means you must account for all Traditional IRA balances when calculating the tax on a conversion.
Some of the most complex — and valuable — planning strategies involve moving money between retirement accounts. Publication 590 provides detailed rules:
Rollovers: You can roll over funds from one IRA to another, or from an employer plan (401(k), 403(b)) to an IRA, without tax consequences if completed within 60 days. You are limited to one indirect (60-day) rollover per 12-month period across all your IRAs. Direct trustee-to-trustee transfers are unlimited and are the preferred method.
Roth conversions: You can convert Traditional IRA funds to a Roth IRA at any time, regardless of income level. The converted amount is added to your taxable income for the year. This can be a powerful strategy in years when your income is unusually low (career transition, sabbatical, early retirement before Social Security begins).
The pro-rata rule: This is the most commonly misunderstood IRA rule. When you convert a Traditional IRA to a Roth, you cannot choose to convert only the non-deductible (after-tax) portion. The IRS treats all your Traditional IRA balances as a single pool. If you have $90,000 in deductible contributions and $10,000 in non-deductible contributions across all your Traditional IRAs, then 90% of any conversion is taxable — regardless of which specific account or contributions you convert.
This pro-rata rule is the primary obstacle to the backdoor Roth strategy for anyone with existing Traditional IRA balances. The most common workaround is to roll your deductible Traditional IRA balances into an employer 401(k) plan (if allowed), which removes them from the pro-rata calculation, leaving only the non-deductible balance for a clean conversion.
Inherited IRAs: Publication 590-B also covers the rules for inherited IRAs, which changed significantly under the SECURE Act. Most non-spouse beneficiaries must now fully distribute an inherited IRA within 10 years of the original owner's death, eliminating the previous "stretch IRA" strategy that allowed distributions over the beneficiary's lifetime.
Mistake 1: Exceeding contribution limits. Contributing more than $7,000 (or $8,000 if 50+) across all IRAs triggers a 6% excess contribution penalty for each year the excess remains. If you discover an excess contribution, you can withdraw it (plus earnings) before the tax filing deadline to avoid the penalty.
Mistake 2: Missing the contribution deadline. IRA contributions for a given tax year must be made by the tax filing deadline (typically April 15 of the following year). There are no extensions — even if you file an extension for your tax return, the IRA contribution deadline does not change.
Mistake 3: Ignoring the 5-year rule for Roth IRAs. Earnings withdrawn from a Roth IRA before the 5-year holding period is met are subject to tax and potentially the 10% penalty. The 5-year clock starts on January 1 of the year of your first Roth IRA contribution (or conversion). This clock applies separately to each conversion for penalty purposes.
Mistake 4: Failing to take RMDs. Missing a required minimum distribution triggers one of the harshest penalties in the tax code: a 25% excise tax on the amount not distributed (reduced from 50% by SECURE 2.0). For a $500,000 IRA with a $19,000 RMD, missing the distribution could cost $4,750 in penalties alone.
Mistake 5: Forgetting the pro-rata rule on backdoor Roth conversions. As discussed above, having pre-tax Traditional IRA balances makes backdoor Roth conversions partially taxable. Many investors execute the backdoor strategy without realising they owe tax on the conversion because of existing IRA balances.
Publication 590 is freely available on IRS.gov and is updated annually. While the document spans hundreds of pages across both parts, the core rules described in this guide cover the situations most individual investors will encounter.