As of January 1, 2010, taxpayers with incomes exceeding $100,000 finally have the opportunity to convert their traditional IRAs and other qualified retirement accounts into a Roth IRA. Plus, people who convert during 2010 can choose to report all of the income on their 2010 returns, or can split the income from the conversion over the following two tax years – 2011 and 2012.

The decision to convert existing retirement accounts to a Roth IRA carries tax ramifications that not only affect you now and down the road, but also impact your beneficiaries who someday stand to inherit your retirement accounts. If you have existing IRAs (traditional IRAs, rollover IRAs, SEP-IRAs, SIMPLE IRAs) and/or 401(k) or 403(b) accounts held with a former employer (or a current employer that allows in-service distributions), and are considering converting some or all of those assets to a Roth IRA, please contact your CPA who can help you work through a detailed analysis prior to your making a final decision. If you aren’t currently working with a CPA, the closestMDTAXES CPA can help you out.

Over the past few years, we wrote a lot of articles about Roth Conversions for our monthly newsletter. You can find an index of all of our Prior Months’ Newsletters on ourNewsletter Archives.

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