Many of my clients have a significant portion of their wealth in IRAs and company retirement plans. There may be a benefit to move money among different plans, each of which involves its own set of costs and benefits.

One such opportunity is the “Roth conversion”. If you have a traditional IRA (one in which you got a deduction each time you made a contribution to the account), distributions from the account (presumably during your retirement) will be treated as taxable income. Distributions from a Roth IRA are tax-free.

You may convert all or a portion of a traditional IRA to a Roth IRA and make future distributions tax-free, but there is a cost: The amount of the conversion is taxable income in the year of the conversion.

There are two reasons why the conversions are at the forefront of tax planning strategies this year:

• There have always been income limitations that prevented many people from making the conversions. Those limitations go away in 2010.
• It is good planning to make conversions when income is down and you can report the income from the conversion in a low tax bracket. Many people’s incomes are down in this economy.

I would like to suggest that you schedule an appointment prior to the end of the year with your tax professional so you can plan on how to save the maximum amount of tax. Make sure you bring your most recent account statements.