Our household MAGI (Modified Adjusted Gross Income) does not allow us to contribute the full amount to a Roth IRA for 2010. In that case is converting some part of Traditional IRA to Roth to complete the gap, a good idea? Do the income restrictions only apply to direct contributions and not to conversions for the Roth IRA?
I know that we cannot claim any tax deductions for the contribution to a traditional IRA (due to MAGI limits), and that is okay with me. But, since I have already been adding post tax dollars to the traditional IRA, will I be taxed again if I convert it to a Roth IRA?