Next year opens up the possibility of converting traditional IRA balances to Roth IRAs for many more people. Prior to 2010, people who had an adjusted gross income (AGI) above $100,000 were not eligible to convert, but that income limit goes away in 2010. (Converting technically means taking a taxable distribution from your traditional IRA, paying income tax on the distribution and depositing the distribution into a Roth IRA account.) Another benefit to converting in 2010 is that income taxes due on the conversion can be deferred until 2011 and 2012.
Given that qualified withdrawals from a Roth IRA are tax-exempt and Roth IRAs are not subject to required minimum distributions (RMDs), a Roth presents some very unique advantages.
Is it right for you?
What are the mechanics of converting to a Roth IRA?
Unfortunately there is no one answer to either of these questions. Give us a call or send us an email and we can discuss your situation.
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