Henry, Raymond & Thompson, LLC Certified Public Accountants       Tax Planning Alert Roth IRA  Conversions available to all in 2010:   The rule in effect until 12/31/2009 is that only individuals or married couples with adjusted gross income of $100,000 or less can convert a regular IRA to a ROTH IRA.  In addition, married individuals who file separately cannot convert a regular ROTH to an IRA.  The income limit disappears in 2010 meaning anyone can convert a traditional IRA to a ROTH IRA including married individuals filing separately.   Get a Head Start.  Those ineligible to fund a Roth IRA due to income limitations can set up a nondeductible IRA and contribute to it in 2009.  In 2010 they can convert it to a ROTH IRA, paying tax only on the earnings.  The tax treatment of the conversion is less favorable for individuals who have IRAs with deductible payins.   When is the tax on the conversion due?  Half of the income (not the tax) is reportable in 2011 and the other half in 2012.  An election can be made to have the entire amount be taxable in 2010.   When should the switch be made?  If you decide that this is a viable option for you, you should make the switch early in the year in order to avoid paying tax on any appreciation in the account.  In the event that the value of the IRA drops, you can unconvert without paying any income tax as long as you do so by the due date of your 2010 tax return (including extensions).  If you reconvert at a later year, you won't get the benefit of the two year income spread.   As always, please consult a tax advisor prior to making any decisions.  Your situation may be unique.