January Tax Tip

You are now permitted to make a direct rollover from your 401(k) plan at work to a Roth IRA (assuming your income is less than $100,000 per year and you do not file married separate).

This conversion is a taxable event (like a conversion from a regular IRA to a Roth IRA) and thus tax planning must be done before making the conversion, as you want to do this in a year in which the tax bills will be minimized to the extent possible.

All taxpayers will be able to do this beginning January 1, 2010, as the income limits are eliminated.