The most flexible tool in your list of tax-planning strategies is the Roth conversion. A Roth conversion allows you to avoid paying the potentially higher 2013-and-beyond tax rates on traditional IRA funds. You simply convert all or any part of those accounts to Roth IRAs and pay taxes on those funds at 2012 rates.
What makes the Roth conversion such a great planning tool is the ability to reverse, or “recharacterize” (in tax speak), the transaction as late as Oct. 15, 2013. You can recharacterize all or a portion of the conversion until this deadline. If Congress passes a major tax reform bill early next year and lowers tax rates across the board (don’t laugh, it could happen), you can press the undo button and there will be no tax implications.