If you've never qualified for a Roth IRA before, your opportunity is coming next year. A benefit of owning a Roth IRA is that qualified withdrawals are tax free. On January 1, 2010, the income limitation that restricts who is eligible to convert Traditional, Sep or SIMPLE IRA assets to a tax-free Roth IRA is eliminated. Roth conversions will no longer be restricted to taxpayers- single or married -with modified adjusted gross incomes of $100,000 or less. Even those who file "married/separate" can convert their Traditional IRA assets to a Roth IRA.
There is an added incentive to convert IRA assets in 2010. You can delay paying the full income tax amount due for three years. Instead, you can elect to pay 50% of the amount when you file your 2011 tax return and the remainder when you file for 2012. (In contrast, the income tax on conversions made after 2010 is due when you file that year's tax return.)
Our professionals have the analysis tools ready to help determine if an IRA conversion works for you. Contact our office today to find out more.