Since its creation more than a decade ago, the Roth IRA has been among the best tax breaks available. You get tax-free withdrawals of your earnings after your taxed dollars have been contributed, and the five-year and age 59 1/2 (whichever is later) (or death, disability, or first-time home buyer) requirements are met.

You have a unique opportunity to keep more of your retirement assets protected from any increase in federal and state taxes by converting IRA assets to a Roth IRA while taxes are still relatively low. Is a Roth IRA conversion right for you? Here are some reasons it might be right:

• There are no required distributions for Roth IRA owners.

• Roth IRA beneficiaries can stretch tax-free distributions over their lifetimes.

• Since distributions are tax-free, Roth IRAs remove the uncertainty over future income tax rates.

• Roth IRA conversions can be undone up to Oct. 15 of the year following the conversion.

Anyone considering a Roth IRA conversion in 2009 must meet the $100,000 modified adjusted gross income (MAGI) limit. That $100,000 ceiling applies to joint or single returns. However, a new Roth era begins in January 2010. Anyone will be able to convert to a Roth IRA.

The $100,000 MAGI ceiling for Roth IRA conversions will be permanently repealed. As a bonus, for the tax year 2010 you will be able to spread the tax impact over the next two years on your 2011 and 2012 tax returns. (Remember — money contributed to a Roth IRA is taxed up front.) In all other years, income must be included on the current year return.

Many individuals will want to implement conversions as soon as possible, while tax rates are low and account values are still depressed. But, before you decide, there are a few things to consider:

• First, the tax should be paid from other monies. Taking cash from the IRA to pay the tax bill would diminish the benefit of the Roth IRA conversion.

• Second, determine how much of your traditional IRAs you might want to convert.

• Third, determine the best timing for a conversion. For individuals who are currently eligible in 2009, more information is known. They know their IRA balances are depressed after last year’s stock market decline, income taxes are at the lowest historical levels in years, and converting now will start the five-year clock for withdrawals as of Jan. 1, 2009.

However, Slott believes there are some reasons why Roth IRAs won’t be taxed.

• First, such a reversal would be politically risky. Most of the legislators in office today voted for this provision and could be seen as reneging on their promises of a tax-free retirement savings account.

• Second, the federal government would lose the tax revenue that is collected up front.

And, even if the government does change the rules on Roth IRAs to make them less appealing, existing accounts may well be grandfathered in, based on how Congress has acted in the past.

Of course, you can determine on your own what makes sense for your situation, taking into account the whole picture including cash flow planning both now and in retirement, as well as tax, investment and estate planning.

Call or write Tom at 1030 Seminary St., Suite D, Napa, CA 94559, 254-0155, fax 254-0158 or e-mail suntrm@aol.com.