The big drop in the stock market has one small upside -- a smaller tax bill if you convert a traditional IRA to a Roth IRA.

Since you contributed pretax dollars to a traditional IRA, you must pay ordinary income taxes on your contributions and any earnings when you convert to a Roth IRA. That's because Roth IRAs require contributions of after-tax dollars.

Converting when your IRA is worth less means you owe less tax.

Let's say you're in the 28% tax bracket and converted your traditional IRA back when it was worth $45,000. You'd owe $12,600 in taxes. But if your IRA is only worth $30,000 now, the tax bill would be only $8,400.

This year, you can convert a traditional IRA if your adjusted gross income (gross income minus income tax deductions) is less than $100,000 whether filing singly or married filing jointly.

The full amount you owe in taxes is due with your 2009 return.

If you wait until 2010, the rules get a little better.

The income limitation disappears, and you can pay the taxes on the conversion in two equal installments in 2011 and 2012.

But if the stock market rebounds over the next year, you'll pay more in taxes.

Also, remember that a Roth IRA isn't for everyone.

It only makes sense if you think you'll be in a higher tax bracket when you retire or you're still 20 or 30 years from retirement and have enough time to rack up significant earnings.

That's because all types of earnings in a traditional IRA are taxed upon withdrawal. Earnings in a Roth IRA are not.