IRS Publication 590: IRA Contributions, Rollovers, and RMDs

IRS Publication 590 is the agency’s guide to Individual Retirement Arrangements, split into two companion documents: Publication 590-A covers contributions, and Publication 590-B covers distributions. Together they set the annual contribution limits, the income thresholds that shrink or eliminate deductions and Roth eligibility, the rollover rules, the penalties for putting in too much or taking out too early, and the schedule for required minimum distributions. For 2026, the combined limit across all your Traditional and Roth IRAs is $7,500, or $8,600 if you are 50 or older.¹

Traditional vs. Roth: Where the Tax Break Sits

A Traditional IRA may give you a deduction the year you contribute, and every dollar you later withdraw is taxed as ordinary income.² A Roth IRA reverses the timing: you contribute with after-tax dollars, and qualified withdrawals in retirement come out completely tax-free.³ The rules that follow apply differently depending on which account you’re funding, so it’s worth keeping the distinction in mind.

2026 Contribution Limits and Deadlines

For 2026, the combined limit across all your Traditional and Roth IRAs is $7,500. If you are 50 or older at any point during the year, the catch-up adds $1,100, bringing your ceiling to $8,600.⁴ Under SECURE 2.0, the catch-up amount is now indexed to inflation and can rise in future years.¹

You cannot contribute more than your taxable compensation for the year. If you earned $4,000, that is your cap regardless of the general limit. The deadline to contribute for any tax year is the federal income tax filing due date, typically April 15 of the following year, not including extensions.⁵

Spousal Contributions

If you file a joint return, a spouse with little or no earned income can still make a full IRA contribution, provided the working spouse has enough taxable compensation to cover both.⁴ Each spouse can contribute up to $7,500 (or $8,600 if 50 or older), but the combined total cannot exceed the couple’s joint taxable compensation.

Recharacterizing a Contribution

If you contribute to one type of IRA and later decide the other type fits better, you can recharacterize the contribution. A recharacterization moves the money, plus any associated earnings, from a Traditional IRA to a Roth or vice versa through a direct transfer between custodians. The deadline is the tax filing due date including extensions, which for the 2026 tax year is October 15, 2027. Recharacterization applies only to contributions. It cannot undo a Roth conversion.

Income Phase-Outs

Traditional IRA Deduction

Anyone with earned income can contribute to a Traditional IRA, but whether you can deduct that contribution depends on two things: whether you or your spouse are covered by a workplace retirement plan, and your Modified Adjusted Gross Income. If neither spouse is covered by an employer plan, the full contribution is deductible at any income level.² When you or your spouse is covered, the deduction phases out across an income range the IRS publishes each fall. Income above the top of the range eliminates the deduction, though you can still make a nondeductible contribution.

Roth IRA Eligibility

Roth contributions have their own income limits that have nothing to do with workplace plan coverage. For 2026, single filers can make a full Roth contribution with a MAGI below $153,000; the contribution phases out between $153,000 and $168,000, and disappears at $168,000. Married couples filing jointly face a phase-out between $242,000 and $252,000.⁴ Married individuals filing separately who lived with their spouse at any point during the year hit a $0-to-$10,000 phase-out range.³

Nondeductible Contributions and the Pro-Rata Rule

When your income rules out a deductible Traditional IRA contribution, you can still contribute on a nondeductible basis. That contribution creates “basis” in your Traditional IRA, representing money that has already been taxed. You track this basis by filing Form 8606 with your tax return for every year you make a nondeductible contribution or take a distribution from an IRA that contains basis.⁶ Skipping Form 8606 is one of the most common IRA mistakes and can result in paying tax twice on the same dollars.

The pro-rata rule governs what happens when you withdraw or convert money from a Traditional IRA that holds a mix of deductible and nondeductible contributions. You cannot cherry-pick the after-tax dollars. Instead, every dollar coming out is treated as a proportional mix of taxable and nontaxable money. The calculation divides the total basis across all your non-Roth IRAs by the total balance of all your non-Roth IRAs (including SEP and SIMPLE IRAs) as of December 31 of the distribution year. Form 8606 walks you through the math.⁷

The Backdoor Roth

High earners who exceed the Roth income limits often use what is informally called a backdoor Roth. The steps: contribute to a Traditional IRA on a nondeductible basis, then convert that balance to a Roth. No income limit blocks nondeductible contributions or Roth conversions, so this effectively lets anyone fund a Roth. The catch is the pro-rata rule. If you already have a large Traditional IRA balance from deductible contributions or rollovers from workplace plans, most of the converted amount will be taxable. The strategy works cleanly only when your total non-Roth IRA balance is close to zero before the conversion.

Fixing Excess Contributions

An excess contribution happens when you put in more than the annual limit, contribute more than your earned income, or make a Roth contribution while over the income threshold. The penalty is a 6% excise tax on the excess amount for every year it remains in the account.⁸ That 6% compounds annually until you fix it, so catching it early matters.

Before the tax filing deadline (including extensions) for the year the excess occurred, you have two clean ways to correct it:

Withdraw the excess plus attributable earnings. The earnings are taxable and, if you are under 59½, subject to the 10% early withdrawal penalty.
Apply the excess to the next year’s limit if you have room. You still owe the 6% tax for the year the excess existed.

Miss the deadline and you can still remove the excess itself, but the 6% tax applies for every year it stayed in the account. The penalty is calculated on Form 5329, which you file with your annual return.⁹

Rollovers and Transfers

Direct Trustee-to-Trustee Transfers

The cleanest way to move IRA money between financial institutions is a direct trustee-to-trustee transfer. The funds go straight from one custodian to another without you ever touching them. Direct transfers are not treated as distributions, are not reported as taxable events, and have no frequency limit.

60-Day Rollovers and the One-Per-Year Rule

In a 60-day rollover, the custodian sends the money to you, and you have exactly 60 calendar days to deposit it into another IRA. Miss that window by even one day and the entire amount is treated as a taxable distribution, potentially with the 10% early withdrawal penalty on top.¹⁰

You are also limited to one 60-day rollover across all your IRAs within any rolling 365-day period. This one-per-year rule aggregates every Traditional, Roth, SEP, and SIMPLE IRA you own, effectively treating them as a single account for this purpose.¹⁰ The restriction does not apply to direct trustee-to-trustee transfers or to rollovers from an employer plan into an IRA.

Self-Certification for a Late Rollover

If you miss the 60-day window for a legitimate reason, the IRS allows self-certification under Revenue Procedure 2020-46. You give a model letter to the receiving financial institution explaining why the deadline was missed. Qualifying reasons include a financial institution’s error, serious illness or death in the family, a misplaced check, severe damage to your home, incarceration, and postal errors, among others.¹¹ You must complete the rollover as soon as the obstacle clears, typically within 30 days. Self-certification is not a formal IRS waiver; if the IRS later audits you and disagrees, you could owe taxes and penalties.¹²

Rollovers From Employer Plans

Funds from a 401(k) or similar plan can roll into a Traditional IRA and keep their tax-deferred status. Designated Roth balances from an employer plan must go into a Roth IRA to remain tax-free. When an employer plan distribution is paid directly to you rather than transferred to the receiving account, the plan administrator is required to withhold 20% for federal income tax.¹³ To complete the rollover in full, you have to replace that 20% from your own pocket and reclaim it as a credit when you file.

Early Withdrawal Penalty and Exceptions

Distributions from a Traditional IRA before age 59½ are taxed as ordinary income and hit with a 10% additional tax, commonly called the early withdrawal penalty. The penalty applies to the taxable portion of the distribution and is calculated on Form 5329.⁸ For Roth IRAs, the penalty can apply to earnings withdrawn before age 59½ or before the five-year holding period has been met.

Publication 590-B lists exceptions where you can take money out before 59½ without the 10% penalty:¹⁴

Unreimbursed medical expenses exceeding 7.5% of your adjusted gross income.
Qualified higher education expenses for you, your spouse, your children, or grandchildren.
First-time home purchase, up to a lifetime limit of $10,000.
Substantially equal periodic payments (SEPP), a series of roughly equal withdrawals that must continue for at least five years or until you reach 59½, whichever comes later.
Total and permanent disability, or death of the account owner.
Health insurance premiums while unemployed for at least 12 consecutive weeks.
Distributions taken to satisfy a federal tax levy.

SECURE 2.0 Additions

SECURE 2.0 added several new penalty-free categories:

Emergency personal expenses. You can self-certify an unforeseeable financial emergency and withdraw up to $1,000 per year without the 10% penalty. If you do not repay the distribution within three years, you cannot take another emergency withdrawal until the repayment is made or you contribute enough new money to cover it.
Domestic abuse survivor distributions. A self-certifying victim of domestic abuse can withdraw the lesser of $10,000 (indexed for inflation) or 50% of the account balance, free of the 10% penalty. Repayment within three years restores the tax treatment as if the withdrawal never happened.
Federally declared disaster distributions. Up to $22,000 can be taken penalty-free within 180 days of a qualifying disaster, with the option to spread the income over three tax years or repay it.

All of these distributions remain subject to ordinary income tax even though the 10% penalty is waived.

Roth IRA Distribution Ordering

Roth IRAs follow a specific order that determines which dollars come out first and what tax treatment attaches to them. That order is why most Roth withdrawals are tax-free and penalty-free, even before age 59½:

Regular contributions come out first. They are tax-free and penalty-free at any time, at any age, for any reason.
Converted amounts come out next, on a first-in-first-out basis. The converted principal is generally tax-free because you paid tax on it at conversion, but if you withdraw converted amounts within five years of that specific conversion, the 10% early withdrawal penalty may apply if you are under 59½.
Earnings come out last. They are subject to income tax and the 10% penalty unless the withdrawal is a qualified distribution.

A qualified distribution from a Roth IRA requires two things: you must be at least 59½ (or disabled, or the distribution goes to a beneficiary after your death), and the account must have been open for at least five tax years dating from your first Roth IRA contribution.³ The five-year clock starts on January 1 of the tax year of your first contribution to any Roth IRA and never resets, even if you open new Roth accounts later.¹⁵

Required Minimum Distributions

Traditional IRA owners (including SEP and SIMPLE IRAs) must begin taking Required Minimum Distributions at age 73. This age applies to anyone who turned 72 after December 31, 2022, under changes made by SECURE 2.0. A second increase to age 75 is scheduled for individuals who turn 74 after December 31, 2032.¹⁶ Roth IRAs are exempt from RMDs during the original owner’s lifetime.

The penalty for falling short of an RMD is a 25% excise tax on the shortfall. If you correct the mistake within the two-year correction window by withdrawing the missed amount and filing an updated return, the penalty drops to 10%.¹⁷

Calculating the RMD

Take the fair market value of each Traditional IRA as of December 31 of the previous year and divide by the life expectancy factor from the appropriate IRS table. You calculate the RMD separately for each Traditional IRA but can withdraw the total from any one or combination of them. Most owners use the Uniform Lifetime Table, which gives a single divisor based on your age. The Joint Life and Last Survivor Table applies only when your sole beneficiary is a spouse more than 10 years younger; it produces a larger divisor and a smaller annual distribution.

Reducing RMDs With a QLAC

A Qualified Longevity Annuity Contract lets you use a portion of your IRA balance to buy a deferred annuity that begins paying out at a later age, typically 80 or 85. The amount in the QLAC is excluded from the account balance used to calculate your annual RMD. For 2026, you can put up to $210,000 of IRA money into a QLAC.¹⁸

Inherited IRAs and the 10-Year Rule

When someone inherits an IRA from an owner who died in 2020 or later, the distribution rules depend on whether the beneficiary qualifies as an “eligible designated beneficiary.” Most non-spouse beneficiaries do not qualify and must empty the entire inherited IRA by December 31 of the year containing the 10th anniversary of the owner’s death.¹⁹

Whether annual distributions are required during the 10-year window depends on whether the original owner had already started RMDs. If the owner died before their required beginning date, the beneficiary can wait and take the entire balance in year 10. If the owner died after starting RMDs, the beneficiary must take annual distributions each year based on the Single Life Expectancy Table, then drain whatever remains by the 10-year deadline.

Eligible designated beneficiaries have more flexibility. This group includes the surviving spouse, the owner’s minor child (until the child reaches the age of majority), individuals who are disabled or chronically ill, and beneficiaries who are not more than 10 years younger than the original owner.¹⁹ They can stretch distributions over their own life expectancy rather than compress them into 10 years. Inherited Roth IRAs follow the same distribution timeline rules, though contributions and earnings that have satisfied the five-year rule remain tax-free.

Key IRS Forms

Several IRS forms track what goes into and comes out of your IRAs.

Form 5498 (IRA Contribution Information). Your custodian files this to report contributions for the tax year and the December 31 fair market value of the account. Because IRA contributions can be made up to the April filing deadline, custodians have until the end of May to send it. The December 31 value on this form is what drives the following year’s RMD.²⁰
Form 1099-R (Distributions From Pensions, Annuities, Retirement Plans, etc.). Issued whenever money leaves your IRA, showing the gross distribution, the taxable amount, and any federal tax withheld. Box 7 contains a distribution code identifying the transaction type, such as Code 1 for an early distribution or Code G for a direct rollover.²¹
Form 8606 (Nondeductible IRAs). You file this yourself whenever you make a nondeductible Traditional IRA contribution, take a distribution from a Traditional IRA that contains basis, or convert Traditional IRA money to a Roth. It calculates the pro-rata split between taxable and nontaxable portions.⁶
Form 5329 (Additional Taxes on Qualified Plans). Filed when you owe the 6% excess contribution penalty, the 10% early withdrawal penalty, or the 25% penalty for a missed RMD. It attaches to your Form 1040.⁸

If you have ever made a nondeductible Traditional IRA contribution and did not file Form 8606, go back and file it for the missed years. Without that record, the IRS has no way to know your basis, and you can end up paying income tax on money that was already taxed on the way in.

1
Internal Revenue Service. 401(k) Limit Increases to $24,500 for 2026; IRA Limit Increases to $7,500
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Internal Revenue Service. IRA Deduction Limits
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Office of the Law Revision Counsel. 26 USC 408A – Roth IRAs
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Internal Revenue Service. Instructions for Form 5329
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