Converting traditional IRAs  to a Roth IRA can be done anytime.  But some investors have incentive to convert by Dec. 31 so that the conversion is reflected on 2000 income tax returns.

 For instance, if you expect to be in a higher tax bracket next year, converting by Dec. 31 will ensure the  conversion income is taxed at your lower 2000 rate.

 Converting by year-end may also be essential if you expect to meet the  income-eligibility requirements this year but not next year. The right to  convert is available only for taxpayers with adjusted gross incomes under  $100,000.

But before you convert, be sure you'll benefit. Not everyone will.

 Whether you're likely to come out ahead by paying tax on your converted funds now in order to reap the benefit of having all your future earnings tax-free depends on your tax bracket now and your expected tax bracket in retirement, how long you  plan to keep the funds invested, how much future growth you anticipate from your  investments and whether you have the cash to pay the tax you'll incur on the conversion.

If you need to dip into your IRA funds in order to pay the tax due on the conversion,  converting isn't advisable. Nor does it usually pay to convert if you expect to be in a much lower ta bracket when you retire. Nor is converting likely to pay off unless you plan to keep the money in the Roth IRA for at least 10 to 15  years.

Also keep in mind that converting to a Roth IRA will raise your adjusted gross income, which could limit your eligibility for the child tax credit and  other income-contingent tax breaks. So be sure to assess the impact before making a conversion

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