IRS Publication 590‑B, Distributions from Individual Retirement Arrangements (IRAs), explains the federal tax rules for withdrawing money from all types of IRAs—traditional, Roth, SEP and SIMPLE—both before and after retirement. It shows when withdrawals are taxable, when required minimum distributions (RMDs) must begin, which early withdrawals are subject to penalties, and which exceptions avoid those penalties. (Investopedia; IRS Publication 590‑B)
Key takeaways
– Publication 590‑B covers distributions (withdrawals) from IRAs: taxation, timing, RMD rules, penalties and exceptions. (Investopedia; IRS Pub. 590‑B)
– Chapter 1 explains rules for traditional IRAs (taxability, RMD timing, early‑withdrawal penalties).
– Chapter 2 explains rules for Roth IRAs (tax-free qualified distributions, ordering rules for withdrawals).
– Chapter 3 addresses permitted early withdrawals for qualified disaster recovery distributions (as updated by SECURE 2.0 for certain disaster victims). (Investopedia; IRS Pub. 590‑B)
– Appendix A contains an RMD worksheet and Appendix B contains life‑expectancy tables used to calculate RMDs. (IRS Pub. 590‑B)
– Most early distributions incur a 10% penalty; for SIMPLE IRAs, that penalty can be 25% for distributions during the first two years of participation. Exceptions exist for things like qualified higher‑education expenses and first‑time home purchases. (Investopedia; IRS Pub. 590‑B)
Why Publication 590‑B matters (What it’s used for)
– Determine whether an IRA withdrawal is taxable and how much tax is due.
– Learn when you must start taking RMDs and how to compute them.
– Identify exceptions to the 10% early‑withdrawal penalty (and special rules for SIMPLE IRAs).
– Learn how to report distributions (including filing Form 8606 when required).
– Understand special distribution rules (e.g., disaster distributions, rollovers, conversions). (Investopedia; IRS Pub. 590‑B)
How Publication 590‑B is organized
– Introductory section: compares traditional vs. Roth IRAs, RMD rules, taxation, and Form 8606 filing requirements. (IRS Pub. 590‑B)
– Chapter 1: Traditional IRA distributions—timing, tax treatment, RMDs, and penalties.
– Chapter 2: Roth IRA distributions—ordering rules, qualified distributions, and exceptions.
– Chapter 3: Qualified disaster recovery distributions and related repayment rules (SECURE 2.0 updates discussed). (Investopedia; IRS Pub. 590‑B)
– Appendices: RMD worksheet (Appendix A) and life‑expectancy tables (Appendix B). (IRS Pub. 590‑B)
Penalties and common exceptions
– General early‑withdrawal penalty: 10% additional tax on early distributions from IRAs unless an exception applies. (IRS Pub. 590‑B)
– SIMPLE IRA early‑withdrawal penalty: increases to 25% if withdrawn within the first two years of participation. (Investopedia; IRS Pub. 590‑B)
– Common exceptions that avoid the 10% penalty: qualified higher‑education expenses, first‑time homebuyer distributions (subject to limits), disability, certain medical costs, substantially equal periodic payments, and others listed in Publication 590‑B. (IRS Pub. 590‑B)
– Qualified disaster distributions (per SECURE 2.0 and related guidance): under certain circumstances, disaster victims may take distributions treated favorably for penalty and income‑spreading purposes; rules include limits, repurchase/repayment opportunities, and special income‑tax spreading. (Investopedia; IRS Pub. 590‑B, relevant SECURE 2.0 guidance)
How to find updates since the most recent 590‑B edition
– The IRS maintains an “About Publication 590‑B” page on IRS.gov that lists updates, legislation, and interim guidance released after the current PDF edition. Check IRS.gov regularly for updates, and follow IRS news/releases for late‑breaking changes. (IRS site / “About Publication 590‑B”; Investopedia summary)
– When legislation (e.g., SECURE or SECURE 2.0 Act provisions) affects IRA distribution rules, the IRS issues interim guidance or posts updates before the next formal publication. (IRS announcements; Investopedia)
Length and edition
– The 2023 edition of Publication 590‑B is 69 pages and includes the three chapters described above plus appendices and worksheets. Check IRS.gov for the latest edition. (Investopedia; IRS Pub. 590‑B, 2023)
Practical steps — what taxpayers should do
1. Identify the type of IRA you have
• Traditional, Roth, SEP, or SIMPLE. Tax rules and penalties differ by type. (IRS Pub. 590‑B)
2. If you’re approaching or at RMD age, calculate RMDs
• Use Appendix B life‑expectancy tables and the Appendix A worksheet in Publication 590‑B to compute RMD amounts.
• Take RMDs by the deadline to avoid excess‑distribution penalties. (IRS Pub. 590‑B)
3. Before taking distributions, check taxability and possible penalties
• Determine whether the distribution is taxable (traditional vs. Roth and whether Roth distribution is “qualified”).
• Review Publication 590‑B’s list of exceptions to the 10% additional tax if you’re under the threshold age. (IRS Pub. 590‑B)
4. If claiming an exception (education, home purchase, disability, disaster), document eligibility
• Keep receipts, proof of disaster eligibility, school invoices, closing documents, physician letters, etc., in case of IRS review. (IRS Pub. 590‑B)
5. When appropriate, plan rollovers and conversions carefully
• Follow rollover timing and reporting rules to avoid unintended taxes and penalties. (IRS Pub. 590‑B)
6. Report distributions correctly to the IRS
• File Form 1099‑R received from your IRA custodian and, if you have non‑deductible contributions or certain conversions, file Form 8606 as required. Publication 590‑B explains when Form 8606 is necessary. (IRS Pub. 590‑B; Investopedia)
7. For disaster distributions, confirm repayment/repurchase rules
• Some disaster distributions can be repaid within statutory windows to avoid tax or to be treated as rollover/recontribution; follow Publication 590‑B and IRS disaster guidance closely. (Investopedia; IRS Pub. 590‑B)
8. When in doubt, get professional advice
• IRA distribution rules interact with personal tax situations and changing law; consult a CPA, enrolled agent or tax attorney if you face large, complex, or time‑sensitive distributions. (General guidance; IRS)
Other useful IRS publications and forms
– Publication 590‑A: Contributions to Individual Retirement Arrangements—rules on making and deducting IRA contributions. (IRS)
– Form 8606: Needed to report nondeductible contributions and certain distributions/conversions. (IRS)
– Publication 525 and Publication 575 may also cover related income and retirement topics. (IRS)
The bottom line
IRS Publication 590‑B is the authoritative IRS guide to IRA distributions: it tells you when you must take money (RMDs), when distributions are taxable, what early‑distribution penalties apply, and which exceptions exist—plus worksheets and life expectancy tables to compute RMDs. Because rules change (legislative updates, disaster relief, SECURE Act provisions), always consult the latest Publication 590‑B on IRS.gov and consider professional tax advice for complex situations. (Investopedia; IRS Publication 590‑B)
Primary sources
– Investopedia summary of IRS Publication 590‑B (source URL provided)
– Internal Revenue Service, Publication 590‑B, Distributions from Individual Retirement Arrangements (IRAs), 2023 edition and related IRS webpages (About Publication 590‑B; Form 8606 guidance)
– Walk you through calculating an RMD for your situation using the worksheet and life‑expectancy table, or
– Summarize the specific exceptions to the 10% early‑withdrawal penalty with examples relevant to your needs. Which would you prefer?