New 2010 Roth IRA Conversion Rules

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As of January 2010, everyone is eligible to convert a traditional account into a Roth IRA, regardless of income.  The taxpayers who were originally shut out by the $100,000 income limit can now take advantage of redeeming their retirement money tax-free. 

Roth IRA's are often more popular than Traditional IRA's due to the fact that you pay tax on money before you contribute it, thus avoiding being taxed at distribution (when the tax rates will most certainly be higher).  However, if you forsee yourself being in a lower tax bracket at retirement age or expect to withdraw the money in less than 5 years, converting to a Roth IRA may not be beneficial for you.  Be sure to consider all factors before deciding if a conversion is best.

Calculate the benefits (if any) of converting to a Roth IRA with our "Roth vs Traditional IRA" calculator.

*Dont forget that it is still not too late to contribue to an IRA for the 2009 tax year.  Click here, or call us, for help preparing your 2009 personal tax return.