There is a tax rule change coming into effect for tax year 2010. Anyone wishing to convert their traditional IRA to a non-taxable Roth IRA will now have two years to pay the tax on this conversion amount.
There are several benefits to doing this conversion. Removing the limit on conversions effectively eliminates the income limit on contributions to Roth IRAs.
A taxpayer with income too high to use a Roth will be able to contribute to a traditional IRA (which does not have income limits for contributions) and immediately convert to a Roth.
We will be covering these topics in our upcoming seminars.