Chapter 9 of IRS Publication 17 covers traditional and Roth IRAs: who can contribute, how much, when a contribution is deductible, and how rollovers, conversions and withdrawals are taxed. Preparers, exam candidates (Enrolled Agent, IRS SEE, AFSP) and self-filers need it. It touches Form 8606, Form 5329, Form 1099-R, Schedule 1 line 20, Schedule 2 line 8 and Form 1040 lines 4a to 4c. In the 2025 edition it is printed pages 77 to 91; the 2023 and 2024 editions have the same chapter on pages 78 to 92. For planning, see our guides on IRA and 401(k) contributions and Roth conversions. Neighbours: Chapter 8, Chapter 10. These are unofficial study notes in our own words; the IRS publication controls.
Amounts and rules with no year named are the same in the 2023, 2024 and 2025 editions. For 2026 we found no change to these rules beyond the amounts in the 2026 column; the 2025 law also created Trump accounts, a separate IRA-type account for children that cannot take contributions before July 4, 2026 (not covered here).
Key terms
| Term | Meaning in one line |
|---|---|
| Compensation | Earned pay: wages, tips, net self-employment earnings, taxable alimony; not interest, rent or pensions |
| Modified AGI | AGI with certain items added back; drives the phase-outs |
| Basis | Nondeductible contributions not yet withdrawn |
| QCD | Qualified charitable distribution paid by the trustee to a charity |
Who can contribute, and how much
- Compensation is required, yours or your spouse's on a joint return. Self-employed pay is net earnings less half of self-employment tax and any plan contribution. Nontaxable combat pay counts; excluded foreign earned income does not (pp. 78-79).
- No age cutoff for traditional contributions since 2020; Roth never had one (pp. 78, 88).
- One shared limit: the lesser of the dollar limit or compensation across every IRA. "50 or older" means age 50 by December 31. Employer SEP and SIMPLE money does not use it up (pp. 78, 89).
- Deadline: the due date of the return, extensions excluded. Tell the custodian which year a January to April 15 deposit is for (p. 79).
- Spousal IRA: on a joint return the lower earner may contribute up to the lesser of the dollar limit or combined pay minus the higher earner's traditional and Roth contributions. No deduction for a former spouse's IRA after divorce or legal separation (pp. 79-80).
Deducting a traditional IRA contribution
The covered-by-a-plan test (pp. 80-81):
- Neither spouse covered: deduct up to the limit at any income.
- Defined contribution plan: covered if money was contributed or allocated for the plan year ending in your tax year. Defined benefit plan: covered if you were eligible that plan year, even if you declined or have no vested benefit.
- Not covered: Social Security or railroad retirement alone, a prior employer's benefits, some reservists (government plan, 90 days or less of active duty) and some volunteer firefighters (accrued benefit up to $1,800 a year). Federal judges are covered.
- Then use Table 9-1 or 9-2: full below the range, none at or above its top, partial between.
| Situation | Range used |
|---|---|
| You are covered; single or head of household | Single range |
| You are covered; married filing jointly (MFJ) | Joint range |
| You are not covered, spouse is; MFJ | Higher spouse-covered range |
| Married filing separately (MFS), lived together, either covered | $0 to $10,000 |
Partial deduction: limit times (top of range minus modified AGI) divided by range width, rounded up to $10, minimum $200. In 2024 and 2025 that is top minus MAGI times 70% (80% at 50 or older), or 35% (40%) for covered joint filers. MFS filers who lived apart all year use the single ranges.
Modified AGI is Form 1040 line 11a (line 11 in 2023 and 2024) before the IRA deduction, plus student loan interest, foreign earned income and housing amounts, Form 8815 savings bond exclusion and Form 8839 adoption exclusion (Worksheet 9-1). Social Security recipients use Pub. 590-A Appendix B; see Social Security benefits taxation.
Nondeductible contributions, Form 8606 and basis
You may contribute up to the limit even when the deduction is cut. The undeducted part goes on Form 8606, required even without a return. Penalties: $50 for not filing, $100 for overstating, unless reasonable cause. Without the form, withdrawals are treated as fully taxable (p. 82).
Basis is nondeductible contributions plus after-tax rollovers, less basis already withdrawn. All traditional, SEP and SIMPLE IRAs count as one pot (pro-rata rule): the tax-free fraction is basis divided by year-end value plus the year's distributions and conversions. Rolling after-tax plan money in needs no Form 8606 that year, but any distribution year does (pp. 82, 85-86).
Roth IRAs
- Eligibility: compensation plus modified AGI below the top of the range; Worksheet 9-2 removes conversion income and adds back the IRA deduction (p. 89). Inside the range: limit less limit times (MAGI minus bottom) over width ($15,000 single; $10,000 joint or MFS living together), rounded up to $10, minimum $200.
- Not deductible or reported. Traditional contributions reduce the Roth limit; a spousal Roth is allowed on a joint return (pp. 88-89).
- Qualified distribution: tax free when the five-tax-year clock (from the first year of any Roth contribution) has run and you are 59 1/2, disabled, paid as a beneficiary after death, or buying a first home (up to $10,000 lifetime) (p. 91).
- Ordering: regular contributions first, then conversions oldest first, then earnings. A separate five-year clock starts January 1 of each conversion year and decides whether the 10% tax hits converted money (p. 91; Pub. 590-B).
- No lifetime RMD for the owner (p. 91).
Rollovers, transfers and conversions
| Move | Key rules | One-per-year limit? |
|---|---|---|
| Trustee-to-trustee transfer | No distribution to you | No |
| 60-day IRA-to-IRA rollover | Redeposit by day 60; waiver possible | Yes |
| Employer plan to IRA | Eligible distributions only; after-tax money becomes basis | No |
| Conversion to Roth | Pre-tax part taxed; no 10% tax if done right | No |
- The 12 months run from the day you receive the money and cover all traditional, Roth and SIMPLE IRAs (p. 83).
- Not rollover-eligible: RMDs, hardship withdrawals, equal-payment series, corrective distributions (p. 84). RMDs cannot be converted either.
- Inherited IRA: a non-spouse beneficiary can only transfer it trustee to trustee; a surviving spouse may treat it as their own (pp. 82-83).
- Conversions made in 2018 or later cannot be recharacterized; regular contributions can, with earnings, by the return due date with extensions (p. 84).
- Report IRA-to-IRA rollovers on lines 4a and 4b with the line 4c rollover box (2023 and 2024 editions: write "Rollover" by line 4b). Rollovers from an employer plan go on lines 5a and 5b (see the forms map). Conversions: Form 8606 Part II (pp. 83-84).
Distributions, the 10% tax and SECURE 2.0 exceptions
Withdrawals are ordinary income less basis, with no capital gain or averaging treatment (p. 85). Form 1099-R shows gross (box 1), taxable (box 2a) and a code (box 7); withholding is covered in Chapter 4.
Before 59 1/2 the taxable part also bears a 10% additional tax (25% on a SIMPLE IRA in its first two years); basis is exempt. Long-standing exceptions: medical costs above 7.5% of AGI, health insurance while unemployed, disability, death, equal periodic payments, higher education, first home ($10,000), IRS levy and reservist distributions (p. 87). Newer ones:
| Exception | Limit or condition | Starts |
|---|---|---|
| Corrective distribution | Earnings on a removed excess, by return due date with extensions | On or after 12/29/2022 |
| Terminal illness | Physician certification (death within 84 months); repayable 3 years; covers IRAs as well as most employer plans | After 12/29/2022 |
| Domestic abuse | Lesser of $10,000 (indexed: $10,300 in 2025, $10,500 for 2026 planning) or 50% of IRA | After 12/31/2023 |
| Emergency expense | One a year; lesser of $1,000 or balance less $1,000 | After 12/31/2023 |
| Birth or adoption; disaster | $5,000 within a year; $22,000 per disaster (Form 8915-F) | In Pub. 590-B, not Pub. 17's list |
An IRS web table of these exceptions lists terminal illness for employer plans only, but the statute, Notice 2024-02, Pub. 17 (p. 87) and Pub. 590-B apply it to IRAs too (governmental 457(b) plans are the exception).
Report: with a correct code 1 and no other extra tax, enter 10% of the taxable part on Schedule 2 line 8 and check the box; otherwise use Form 5329 and claim the exception (p. 88). See early withdrawal penalty.
Required minimum distributions and QCDs
- Timing. The first RMD is for the year you reach the RMD age but may wait until April 1 of the next year, which means two RMDs that year. Later ones are due December 31 (p. 85).
- Amount. Prior December 31 balance divided by the Uniform Lifetime Table divisor (26.5 at 73, 24.6 at 75); the total may come from any traditional IRA (Pub. 590-B).
- Age by birth year (2024 final regulations): born July 1, 1949 through 1950, 72; 1951 to 1958, 73; 1959, left reserved in those regulations because the statute gives both 73 and 75 (a July 2024 proposed rule would set 73; we could not confirm it is final); 1960 or later, 75.
- Shortfall tax: 25%, or 10% if you take the missing amount and file within the correction window. Waiver possible for reasonable error. See RMD penalties.
- Beneficiaries: unless an eligible designated beneficiary (spouse, the owner's minor child, a disabled or chronically ill person, or anyone no more than 10 years younger than the owner), empty the IRA by December 31 of the tenth year after death; annual withdrawals also apply if the owner had reached the required beginning date (final regulations, from 2025).
- QCD. Age 70 1/2 or older, paid directly by the trustee (not an ongoing SEP or SIMPLE) to an eligible charity. Excluded from income and counts toward the RMD; limited to otherwise-taxable amounts, reduced by IRA contributions deducted after 70 1/2, and no charitable deduction. Report on line 4a with the line 4c QCD box (Pub. 590-B). See charitable giving.
Excess contributions and other penalty traps
- Excess contribution: more than the lesser of the limit or compensation (bad rollovers included). The 6% tax recurs yearly, capped at 6% of year-end IRA value, on Form 5329. Withdraw the excess and its earnings by the due date with extensions to avoid it; the earnings are taxable but face no 10% tax (pp. 86-87).
- Later removal: tax free after the due date if no deduction was taken and the year's contributions stayed within the limit (p. 87). Roth excess can be applied to a later year (p. 90).
- Prohibited transactions (borrowing, selling to or pledging the IRA) end IRA status as of January 1; collectibles count as distributed, with limited coin and bullion exceptions (p. 86).
By tax year: 2023, 2024, 2025 and 2026
| Item | 2023 | 2024 | 2025 | 2026 planning |
|---|---|---|---|---|
| IRA limit | $6,500 | $7,000 | $7,000 | $7,500 |
| Catch-up, 50+ | $1,000 | $1,000 | $1,000 | $1,100 |
| Spousal total, both under 50 | $13,000 | $14,000 | $14,000 | $15,000 |
| Deduction, covered single/HoH | $73,000-$83,000 | $77,000-$87,000 | $79,000-$89,000 | $81,000-$91,000 |
| Deduction, covered MFJ | $116,000-$136,000 | $123,000-$143,000 | $126,000-$146,000 | $129,000-$149,000 |
| Deduction, spouse covered | $218,000-$228,000 | $230,000-$240,000 | $236,000-$246,000 | $242,000-$252,000 |
| Roth, single/HoH | $138,000-$153,000 | $146,000-$161,000 | $150,000-$165,000 | $153,000-$168,000 |
| Roth, MFJ | $218,000-$228,000 | $230,000-$240,000 | $236,000-$246,000 | $242,000-$252,000 |
| RMD age (born 1951-1958) | 73 | 73 | 73 | 73 |
| QCD limit | $100,000 | $105,000 | $108,000 | $111,000 |
| One-time QCD to split-interest entity | $50,000 | $53,000 | $54,000 | $55,000 |
MFS living with spouse: $0 to $10,000 for deduction and Roth, every year. 2026 column: planning figures from Notice 2025-67 and the 2025 law; Pub 17 (2026) is not yet published. The 2026 spousal total is our arithmetic (limit doubled).
Rule changes
- 2023: limit $6,500; RMD age 73 with the 25% and 10% tax (the 2023 edition body still says 72 in places); terminal-illness and corrective-distribution exceptions; Roth SEP and SIMPLE IRAs. No one reached the new RMD age until 2024.
- 2024: limit $7,000; domestic abuse and emergency exceptions; QCD limit indexed.
- 2025: Form 1040 line 11a and line 4c rollover box; Form 8839 line 30; final RMD regulations apply.
- 2026 planning: catch-up indexed to $1,100.
Worked examples
Example 1 (tax year 2025). Sam, single, 40, is covered by a 401(k), has modified AGI of $84,000 and contributes $7,000. Range: $79,000 to $89,000. $89,000 - $84,000 = $5,000, times 70% = $3,500 deductible (Schedule 1 line 20). The other $3,500 is nondeductible: Form 8606 line 1.
Example 2 (tax year 2026 planning figures). Rahul, 52, earns $90,000 and is covered at work; Meera, 49, has no pay. Joint modified AGI is $90,000. Rahul contributes $8,600 ($7,500 + $1,100). Meera's limit is the lesser of $7,500 or $90,000 - $8,600 = $81,400, so $7,500. Both are below their ranges ($129,000 and $242,000), so all $16,100 is deductible.
Example 3 (tax year 2025). Lena has $10,000 of basis, converted $10,000 in 2025 and held $90,000 in traditional IRAs at year-end. Form 8606: line 9 = $90,000 + $0 + $10,000 = $100,000; line 10 = $10,000 / $100,000 = 0.100. Tax-free part of the conversion (line 11) = $1,000; taxable (line 18) = $9,000, on Form 1040 line 4b ($10,000 on line 4a). Remaining basis (line 14) = $9,000. Under 59 1/2, withdrawing the converted money before 2030 can bring the 10% tax on $9,000.
Common mistakes and exam traps
- Using compensation instead of modified AGI, or ignoring a covered spouse.
- Thinking an extension extends the contribution deadline (it only extends removal of an excess).
- Skipping Form 8606 and being taxed twice.
- Counting rollovers per IRA instead of per person, or counting conversions and transfers against the limit.
- Rolling over or converting an RMD, or using the old age 72 or 70 1/2.
- Mixing up the two Roth five-year clocks.
- Deducting a QCD, or letting the owner receive the check first.
Forms and lines map
| Form and line (2025 forms) | What goes there |
|---|---|
| Schedule 1 line 20 | IRA deduction |
| Form 1040 line 11a | AGI (line 11 in 2023 and 2024) |
| Form 1040 lines 4a, 4b, 4c | IRA distributions, taxable amount, rollover and QCD boxes (box 3: split-interest election) |
| Form 1040 lines 5a, 5b | Employer-plan amounts; Pub. 17 p. 84 cites 4a, but its Worksheet 9-2 cites 5b |
| Form 8606 | Basis and pro rata (lines 1 to 15c); conversions (16 to 18); Roth distributions (19 to 25c) |
| Form 5329; Schedule 2 line 8 | Early distribution, excess contribution and RMD taxes |
2026 Form 1040 draft keeps lines 4a to 4c.
Check yourself
Tax year 2025: A 52-year-old earned $5,000. Traditional IRA limit?
Answer: $5,000, the lesser of $8,000 and compensation.
Tax year 2026 (planning): Single, covered by a 401(k), modified AGI $91,000. Deduction?
Answer: None; $91,000 is the top of the $81,000 to $91,000 range.
Tax year 2025: Single, 38, modified AGI $157,500. Roth limit?
Answer: $3,500. The cut is $7,000 x $7,500 / $15,000 = $3,500.
Tax year 2024: With an extension, last day for a 2024 IRA contribution?
Answer: April 15, 2025; extensions do not apply.
Tax year 2025: After rolling IRA-1 into IRA-2 in March, can you roll over a June IRA-3 withdrawal?
Answer: No. One IRA-to-IRA rollover per 12 months covers all your IRAs.
Tax year 2026 (planning): Turning 75 in 2026, December 31, 2025 balance $246,000, $6,000 QCD in 2026. RMD still owed?
Answer: $4,000. RMD = $246,000 / 24.6 = $10,000, less the QCD.
Tax year 2024: A 40-year-old withdraws $20,000 from a traditional IRA, no basis, no exception. Tax?
Answer: $20,000 ordinary income plus $2,000 additional tax.
Tax year 2024: A domestic abuse victim has a $14,000 IRA. How much avoids the 10% tax?
Answer: $7,000, the lesser of $10,000 and 50% of $14,000.
Tax year 2023: Dev turned 72 in 2023. When is his first RMD?
Answer: For 2024, due April 1, 2025; his RMD age is 73.
Frequently asked questions
Can I fund a Roth IRA if my income is too high?
Not directly at or above the top of the range ($165,000 single, $246,000 joint for 2025). A nondeductible contribution followed by a conversion is one route, but the pro-rata rule can make part taxable. See Roth conversions.
What if I miss an RMD?
The shortfall is taxed at 25%, or 10% if corrected in time. File Form 5329 and ask for a waiver if the cause was reasonable error.
Can a CPA check my IRA reporting?
Yes. A CPA can review a return to confirm the deduction, Form 8606 basis, rollover and RMD reporting.
Official sources
- IRS Publication 17 (2025), chapter 9
- IRS Publication 17 (2024), chapter 9
- IRS Publication 17 (2023), chapter 9
- IRS Publication 590-A (2025), Contributions to IRAs
- IRS Publication 590-B (2025), Distributions from IRAs
- IRS Notice 2023-75 (2024 retirement plan and IRA amounts)
- IRS Notice 2025-67 (2026 retirement plan and IRA amounts)
This page is a plain-language summary. The official source controls if there is any difference.
General information only, not tax, legal or accounting advice for your situation. Rules, limits and deadlines change; confirm the current rules with the official source or a qualified professional before you act. Reading this page does not create a professional relationship with CPA Tax Payroll and Accounting Corp.