If your traditional IRA is at a low market value, and you plan to hold that investment for a long time, converting it to a Roth IRA may be a good strategy. Remember though, that the conversion will increase your 2011 adjusted gross income.
Or, reverse your Roth IRA conversion: If you converted into a Roth IRA from a traditional IRA last year, and if the value of your account has declined, you may want to switch back -- temporarily.
For example, she says: If in 2010, your IRA was worth $100,000 when you converted to a Roth IRA, then you paid tax on $100,000 in 2010. But if the Roth IRA is now worth just $80,000, undo the conversion with your broker and file an amended return for 2010 for the $100,000. Then, pull a double-reverse and reconvert it to a Roth in 2011, and you'll only pay tax on $80,000 -- saving you taxes on $20,000.