If you have money in traditional IRA accounts and would like to convert them to Roth IRA's, 2010 is the year to do it!  Prior to 2010, you could only convert from traditional to Roth IRA if your adjusted gross income was below certain limits.  For years beginning after 12/31/2009, these limits have been eliminated.  "Why would I want to do this?", you ask.   "And won't I have to pay tax on the converted amount?"

Roth IRA Advantages:  Once in a Roth IRA, the contributions and all the earnings are tax free FOREVER!  There is NO required minimum distribution in your lifetime.  Inherited Roth IRA's are not taxable to your heirs.  You can continue to make contributions past age 70 as long as you have earned income.

Tax Payment:  Yes, tax will be due on the amount of the conversion that is taxable.  If all of your contributions to the traditional IRA were deductible, then the full amount of the conversion will be taxable.  If you made nondeductible contributions, you will be taxed only on the earnings.  For conversions made in 2010, the default position is that the taxable amount will be treated as 50%having been received in 2011 and 50% received in 2012; thus you would be taxed at whatever rates are effective for those years.  However, you may elect to treat the income as being received in 2010 and pay all of the tax in 2010.  It will be important to crunch all the numbers considering that tax rates in 2011 and 2012 may well be higher than in 2010.

For What It's Worth:  I am converting my traditional IRA's to Roth IRA's immediately and I will pay the tax in 2010.  Of course, it is important that you are able to pay this tax with money that is outside the retirement accounts.

Further information is available on the IRS website at www.irs.gov.

Your child is now earning his own money and feeling quite independent, but when he is ready to fill out that first tax return, make sure the experience does not turn into an expensive lesson for both of you.

If your child is otherwise qualified as a dependent, and you are still providing more than half her support, she will qualify as an exemption on your return.

However, if the child fails to correctly answer the question about who is qualified to claim him, parents will not be able to claim the child on their return unless an amended return is submitted.  The 1040EZ is confusing, but your child should check the "You" box on line 5 of the 1040EZ, which reads, "If someone else can claim you (or your spouse if a joint return) as a dependent, check the applicable box below". Software packages usually present this as a question "Can someone else, such as your parents,claim you as a dependent." The child should answer "Yes".

This is not an issue of picking the most ego-satisfying or financially attractive option. The tax code is very clear on the requirements to determine when someone is a dependent. Parents cannot claim the child if they do not meet those requirements, and the child cannot claim the exemption if he is a dependent.

Although losing the exemption can cost your child some tax, it will typically cost you far more if he erroneously claims his own exemption.

For example, let's assume your child earned $6000.  If your child claimed her own exemption, the $5450 standard deduction and $3500 exemption would be subtracted from the $6000 earned, which would make tax owed zero. Unfortunately, the parents lose the $3500 exemption on their return.  Since they are at least in the 15% bracket, they will see $525 less in their refund (or pay $525 more if they owe).

If instead, the box is checked, the child loses the $3500 exemption. After subtracting the standard deduction of $5450, there would remain $550 of income that would be taxed at 10%, costing your child about $55. However, the parents gain the $525.

Earlier is better when it comes to working on your taxes. Taxpayers are encouraged to get a head start on tax preparation, especially since early filers avoid the last minute rush and get their refunds sooner. 

Here are seven easy ways to get a good jump on your taxes long before the April deadline is here:

1. Gather your records in advance. Make sure you have all the records you need, including W-2s and 1099s. Don't forget to save a copy for your files.

2. Get the right forms. They're available around the clock on the IRS Web site, IRS.gov.

3. Take your time. Don't forget to leave room for a coffee break when filling out your tax return as rushing can mean making a mistake.

4. Double-check your math and verify all Social Security numbers. These are among the most common errors found on tax returns. Taking care will reduce your chance of hearing from the IRS and speed up your refund.

5. Get the fastest refund. When you file early, you receive your refund faster. When you choose direct deposit, you receive your refund sooner than waiting for a check

6. E-filing is easy. E-filing catches math problems, provides confirmation your return has been received and gives you a faster refund.

7. Don't panic. If you have a problem or a question, remember the IRS is there to help. Try the IRS Web site at IRS.gov or call the IRS customer service number at 1-800-829-1040.