# IRS Publication 590-B: What It Is, How It Works

## What Is IRS Publication 590-B?

[IRS Publication 590-B](https://www.irs.gov/pub/irs-pdf/p590b.pdf) explains the tax implications of withdrawing money from any type of [individual retirement account (IRA)](https://www.investopedia.com/terms/i/ira.asp), before or after retirement. It specifies when you can't withdraw money without paying a penalty and when you _must_ withdraw money.

### Key Takeaways:

*   IRS Publication 590-B calculates the taxes you'll owe when you withdraw money from any type of individual retirement account (IRA).
*   If you have a traditional IRA, see Chapter 1 of IRS Publication 590-B.
*   If you have a Roth IRA, see Chapter 2 of IRS Publication 590-B.

The publication includes three chapters, several appendixes, and worksheets to assist the taxpayer. [Publication 590-A](https://www.irs.gov/pub/irs-pdf/p590a.pdf) covers the tax rules for [contributing to retirement accounts](https://www.investopedia.com/terms/r/retirement-contribution.asp).

## Understanding IRS Publication 590-B

There are several types of IRAs, including the traditional IRA and the Roth IRA, the [SEP](https://www.investopedia.com/terms/s/sep.asp), and the SIMPLE IRA. But the biggest distinction is [between the traditional and the Roth IRA](https://www.investopedia.com/retirement/roth-vs-traditional-ira-which-is-right-for-you/):

*   A traditional IRA permits a taxpayer to contribute pretax earnings up to a certain amount each year. The wage-earner gets an immediate tax break, and taxes on the amount paid into the account are deferred until the taxpayer withdraws money.
*   A Roth IRA allows a taxpayer to contribute post-tax earnings up to a certain amount each year. The wage-earner pays the income taxes upfront, so withdrawals taken after retirement won't be taxed.

> **Important**
>
> An IRA distribution for higher education expenses or a first-time home purchase isn't subject to the 10% early withdrawal penalty.

IRS Publication 590-B is organized to explain the different tax implications of the traditional and Roth types of IRA accounts:

### Chapters 1 and 2

Chapters 1 and 2 of IRS Publication 590-B explain all the rules for the traditional IRA and the Roth IRA, respectively. Chapter 1 covers when you can withdraw money and at what age you must withdraw money. It also includes penalties for early withdrawals from traditional IRAs.

### Chapter 3

Chapter 3 covers permitted early withdrawals used to pay for damage caused by natural disasters. As of the latest IRS Publication 590-B, for 2023 tax returns, a qualified disaster recovery distribution must meet certain criteria as described in the [SECURE 2.0 Act of 2022](https://www.investopedia.com/secure-2-0-definition-5225115). Section 331 of the latest SECURE Act allows victims of a qualified [natural disaster](https://www.investopedia.com/terms/d/disasterloss.asp) to withdraw up to $22,000 from their retirement account without penalty. The withdrawal is treated as gross income over three years without penalty (effective as of the passage of the bill). All such distributions require repayment of the money to avoid a penalty later.

### Introduction

An introductory section includes a table clarifying the differences between traditional and Roth IRAs, rules for required distributions, taxation of these accounts, and regulations for filing [Form 8606](https://www.irs.gov/pub/irs-prior/f8606--2021.pdf) for non-deductible IRAs. This is the form that must be filed to report distributions from any type of IRA.

### Final Sections

A later section provides general information on getting help with tax-related issues.

Appendix A is a worksheet for determining your [required minimum distribution (RMD)](https://www.investopedia.com/articles/retirement/04/120604.asp), and Appendix B contains a life expectancy table needed to calculate RMDs.

## Penalties and Exemptions in Publication 590-B

Keep an eye on the penalties detailed in Publication 590-B, and the exceptions to those penalties.

For example, most early distributions trigger a 10% penalty. The penalty goes up to 25% if money is withdrawn during the first two years of participation in a SIMPLE IRA. However, a withdrawal for [qualified higher education expenses](https://www.investopedia.com/terms/q/qhee.asp) or first-time home purchase isn't subject to the penalty.

## Other Useful IRS Publications

The IRS has numerous publications explaining the ins and outs of qualified retirement plans.

*   If you run a small business or work for one, you may be interested in [IRS Publication 560: Retirement Plans for Small Business](https://www.irs.gov/publications/p560).
*   Another IRS publication, [Retirement Plans](https://www.irs.gov/retirement-plans), has extensive information on types of retirement plans and retirement plan administration.
*   An [IRS FAQs page](https://www.irs.gov/retirement-plans/retirement-plans-frequently-asked-questions-faqs) contains brief information about the various types of IRAs and their tax implications.

## What Is IRS Publication 590-B Used For?

IRS [Publication 590-B](https://www.irs.gov/pub/irs-pdf/p590b.pdf) details the tax implications of taking money out of any type of IRA, before or after retirement. It specifies when you can't withdraw money without paying a penalty and when you must withdraw money via required minimum distributions in retirement.

## How Can I Find Out About Changes Since the Last Publication 590-B Was Published?

The IRS provides updates about related developments before a new version of Publication 590-B is published on a web page titled "[About Publication 590-B, Distributions from Individual Retirement Arrangements (IRAs)](https://www.irs.gov/forms-pubs/about-publication-590-b)." These may include legislation enacted after the current edition was published.

## How Long Is IRS Publication 590-B?

"2023 IRS Publication 590-B," the latest edition available as of May 2024, has 69 pages. It has three chapters and additional sections that provide information about the rules for the traditional IRA and the Roth IRA, permitted early withdrawals used to pay for damage caused by natural disasters, rules for required distributions, taxation of IRAs, regulations for filing the form required to report distributions from any type of IRA, and more.

## The Bottom Line

IRS Publication 590-B spells out the tax implications of withdrawing money from an IRA before or after you retire. The publication comprises three chapters, several appendixes, and worksheets to assist the taxpayer. Publication 590-A covers the tax rules for contributing to retirement accounts. The publication also outlines the penalties for early withdrawal of IRA funds, and the exceptions to those penalties.

> **Article Sources**
>
> 1.  Internal Revenue Service. "[Traditional and Roth IRAs](https://www.irs.gov/retirement-plans/traditional-and-roth-iras)."
>     
> 2.  Internal Revenue Service. "[Publication 590-B](https://www.irs.gov/pub/irs-pdf/p590b.pdf)," Page 27
>     
> 3.  Internal Revenue Service. "[2023 Publication 590-B](https://www.irs.gov/pub/irs-pdf/p590b.pdf)," Pages 36-37.
>     
> 4.  Internal Revenue Service. "[Publication 590-B](https://www.irs.gov/pub/irs-pdf/p590b.pdf)," Page 28.