What is a Roth IRA conversion?
Converting your existing Traditional IRA to a Roth IRA is technically a distribution, as you will owe tax on the amount converted that is included in your gross income. However, you don’t receive these funds as they are converted to a Roth IRA account. You qualify for the conversion if your Modified Adjusted Gross Income (MAGI) is $100,000 or less and you are a single or joint filer in 2009. Beginning in 2010, the income cap will be eliminated, and taxpayers will be able to convert their Traditional IRA to a Roth IRA regardless of their income (MAGI). Unless the taxpayer elects otherwise, half of the income resulting from the conversion will be included as income in 2011 and the remaining half in 2012. An IRA owner is allowed to convert a Traditional, SEP, or SIMPLE IRA (after 2 years) or an employer sponsored plan such as a 401(k) to a Roth IRA. IRA owners will pay ordinary income tax on the taxable amount converted in the year of conversion. You cannot convert your Required Minimum D
