The IRS provides limited opportunities for changing existing traditional IRA accounts to Roth IRAs. In the past, taxpayers who had adjusted gross income (AGI) above $100,000 were precluded from converting a traditional IRA to a Roth IRA. Beginning with the 2010 tax year, however, this limitation is lifted, thereby allowing many more taxpayers the opportunity to convert to a Roth IRA. The amount that you convert would be added to your taxable income this year and you would have to pay the additional tax, but amounts that you withdraw in retirement would be tax free. Additionally, a special provision may allow you to postpone reporting the income until the two following years.
Traditional IRAs allow you to fund a retirement account with pre-tax dollars. You pay tax on the money that you withdraw, presumably during retirement. You fund Roth IRAs with earnings on which tax has already been paid, but you do not have to pay tax when you withdraw the funds. Choosing which type of IRA best suits your personal situation involves a number of considerations, including projections of what your tax rate will be when you withdraw the money.
The rules governing IRAs are complicated. You should seek competent advice before making any decisions.