Change is the one constant in today’s society, and this concept also applies to IRA rollover rules.

But this change can potentially be a positive one. For 2010, the 100,000 AGI limitation rule will be done away with, thus allowing higher income taxpayers the opportunity to take advantage of a rollover now if the tax rates are considered favorable to you based on individual risks and long-term planning.

There are three key benefits associated with rolling over the traditional IRA to a ROTH IRA, and they are as follows: 1) A taxpayer can take future distributions tax free, 2) Contributions can continue past age 70 1/2, and lastly, 3) there are no minimum distribution requirements.

You have to be careful to leave the rolled-over funds within the ROTH IRA for at least five years and be age 59 1/2 to avoid the 10 percent early withdrawal penalty. There are two basic methods of rollover. The first method is where the traditional IRA distribution is received and has to be contributed to the ROTH within 60 days. The second type is executed through a plan trustee.

The taxpayer has to include within gross income the amount of the rollover funds; however, the 10 percent penalty does not apply. To further entice you, the IRS allows taxpayers the ability to spread the tax owed from a ROTH conversion over a two year period in 2010. The only tax status that does not qualify for the rollover is married filing separate; all others apply.

What if I change my mind, you may ask? No worries, if a taxpayer changes his or her mind on the rollover, the action can be reversed (re-characterized) so long as it is done via a trustee-to-trustee transfer no later than the due date or extended due date of the tax return for the year the conversion originally occurred. Also, it is important to keep in mind that there can only be one rollover per year.

Unrelated to the ROTH conversion, but perhaps of special interest, is the opportunity to roll over a 2009 Required Minimum Distribution received during 2009 back into the plan or IRA account. Because of the extreme fall in securities values this past year, a law change permitted the suspension of the 2009 RMD.

Because some individuals and plans did not act quickly enough, 2009 distributions were made.

Taxpayers, if they act before Nov. 30, 2009, can roll these distributions back into their plans tax-free. As with any crucial matter such as this one, seek professional guidance before making a decision.

Tim Byrd is a CPA with Silas Simmons, LLP.