Recent changes to tax laws and investment allowances now make it easy to transfer funds from a traditional IRA to a Roth account. In past years there was a $100,000 adjusted gross income limit that prohibited high wage earners from contributing to a Roth account. Beginning in 2011, new regulations allow conversions for all wage earners regardless of income. There are still a few sticking points, however. Individuals are encouraged to read over the new rules before considering a rollover or conversion from a traditional IRA to a Roth.Converting IRA And 401K PlansAnyone can now convert to a Roth plan, but those who transfer funds from a traditional IRA or 401K will still find it difficult to make new contributions. There is still an upper income limit for singles individuals, married couples who file jointly, couples who file separately, and heads of households.Those who earn too much to make additional contributions to a new Roth plan can make non-deductible contributions to a traditional IRA plan instead. The funds can then be converted to the Roth plan with no penalty because the Roth contribution was not direct.Examples Of Allowed ConversionsAn individual can contribute $5,000 annually to a traditional IRA. The money is tax deferred but the IRA can be converted to a Roth plan on an annual basis. So long as the current rules are in force, individuals who earn too much money to contribute annually to a Roth plan can instead convert their traditional IRA each and every year.This process involves setting up a traditional IRA plan each year, contributing non-deductible funds and then transferring the account annually. Many high wage earners are taking advantage of this allowance and contributing annually to a Roth plan because of the non-deductible contributions made to the traditional IRA.Other ConsiderationsIt may not always make good financial sense to convert to a Roth account. The growth tax fee may not make the conversion viable as a real investment, or the individual may not have the cash to pay the tax up front. It is important to remember that the amount of tax one will have to pay depends on whether the contributions to a traditional IRA were tax-deferred. If the contributions to a simple IRA are non-deductible, it changes the future return on investment significantly.Most financial experts agree that the choice to convert to a Roth plan should only be made after a detailed examination of the portfolio by a consultant. In the end, conversions from a traditional IRA make sense only if the tax collected at a later date is outpaced by the interest earned.