I absolutely love this savvy financial planning tool. When appropriate, the conversion can ultimately save thousands of dollars in taxes. The best part is that is extremely easy. First thing to know about a Roth IRA conversion is the benefits that a Roth itself has to offer. The main difference from its brother the Traditional IRA, is the taxation.
The Roth is taxed at the seeding, and the Traditional is taxed at harvest. This change from taxing money at the beginning instead of the end is profound when you consider a 20-30 year time frame of invested dollars. In order to do this, the contributions into a Roth are not deductible.