I have a few clients who belong to a large union that is going to allow them to cash out of their 401k accounts. I have encouraged the first one that called me not to cash out because of the tax and penalties but since he is not happy with their performance I told him he could roll it into a traditional IRA with no tax consequences. Looking at the 2010 tax laws, would anything stop him from then moving it to a roth IRA and taking advantage of the new law allowing to pay the taxes in 2011 and 2012. Since we actually don't have to do this type of transaction in two steps anymore can he move his money from his 401K directly to a roth and take advantage of the new law.
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