As the end of the 2010 tax year comes to a close, an interesting question is coming up more often.
- Should I convert my IRA to a Roth in 2010?
There is a special 2010 tax trick that allows you to convert your traditional IRA to a Roth IRA and spread the taxes from the IRA conversion out over the next two tax years. That little tax secret expires at the end of 2010, which means that unless you convert your IRA to a Roth before year-end, you can’t lower your taxes with that tax loophole.
Roth IRA conversions are open to everyone regardless of income from now on. However, there are still Roth IRA income limits for contributions.
Is It A Good Idea To Convert IRAs in 2010?
Normally, making a big tax move like a Roth conversion late in the year is not a good tax strategy for most people because it doesn’t give you any time to compensate for it.
For example, if you were to convert an IRA to a Roth IRA in 2011, you will owe income taxes on the amount of money converted, minus any non-deductible IRA contributions you made to the traditional IRA or 401k you are converting to a Roth. Wit
