Part 6/10:
Converting a traditional IRA or 401(k) into a Roth IRA involves transferring funds into a designated Roth account and paying taxes on the amount converted. If the conversion occurs within the same financial institution, the process is typically seamless. Otherwise, if mailing a check, the important deadline is to deposit the funds within 60 days to avoid penalties.
There's no annual limit on how much money can be converted, but it’s wise to perform conversions strategically to avoid sudden spikes into higher tax brackets. The taxes owed will reflect your current income tax rate, so it is generally best to convert in years when your income is lower.