Possibly. Your ability to do so depends on the same two factors that determine your eligibility to contribute to a Roth IRA in the first place: your modified adjusted gross income (MAGI) for the year and your tax filing status. However, special rules govern the conversion of assets from a traditional IRA to a Roth IRA.

If you file as a single taxpayer or head of household and your MAGI for the year is less than or equal to $100,000, you can convert all or part of your traditional IRA funds to a Roth IRA. If your filing status is married filing jointly, the $100,000 figure must include the MAGI of both you and your spouse. If you expect your combined MAGI for the year to exceed the $100,000 limit, you may be able to defer income or take other steps to bring it below the threshold. If your filing status is married filing separately, you typically cannot convert funds from a traditional IRA to a Roth IRA, regardless of income. (Note: The $100,000 limitation is repealed after 2009, and, at that time, married individuals filing separate returns will also be able to convert funds.)

Any funds you convert during the tax year, other than amounts that represent nondeductible (after-tax) contributions to your traditional IRA, are treated as taxable income for that year. This means that if the contributions originally made to your traditional IRA were deductible, you may have to pay income tax on the amount converted to the Roth IRA. Also, although the premature distribution tax (for IRA withdrawals prior to age 59½) does not apply when you convert funds to a Roth IRA, it may apply if you later withdraw from the Roth IRA within five years after you convert funds. Finally, you cannot convert required minimum distribution amounts from a traditional IRA to a Roth IRA. Given the possible tax consequences of this conversion, you may wish to consult experienced tax and financial professionals before you commit to the process.