Effective January 1, 2010, the option of converting a traditional IRA to a Roth IRA is available to all, even those taxpayers originally shut out by the $100,000 income limit for eligibility. Roth IRAs are popular because qualifying distributions are tax-free and required minimum distributions (RMDs) aren’t required at age 70½.

If you convert in 2010, special rules allow you to spread the income over two years (2011 and 2012).   There are many factors to consider when making a conversion and in some situations, paying the tax now would be more beneficial than paying it later.  If you’re interested in this new opportunity or want to understand how it may impact your taxes, contact us for details.

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