I have a few questions pretaining to moving a 401k eventually into a Roth IRA.

First a little info about me. I am 26 and recently decided to go back to school full-time after working for 4 years. During this time at work I have established appoximately $20k in my work 401k along with another 8-9k in a Roth IRA with Vanguard. This year I did contribute some money into my Roth IRA as well however I think it is around $500.

My goal is to rollover my 401k into a Roth IRA while paying the least amount of taxes by taking advantage of my two years of low income as a student. My question is what is the best way to do this? While at school income and taxes benefits will substantially lower my AGI to the point where I want to try to convert most of it without paying any taxes on it.

Questions:
Can I roll a 401k directly into a Roth IRA or does it first have to go into a traditional IRA? If you roll over the 401k into a traditional IRA first can you then move it into a Roth over a couple years or do you have to do it all at once? This will be the ideal approach since the first year I can move as much as I could without paying any taxes and then move the rest the second year. I know that to be eligible to contribute to a Roth IRA you have to make at least as much as the contribute amount during that year, is this also true for rollovers? If this is true during the second year I will have an internship but I will have to be awhere of how much I make.

Let me know what you think. If this is possible and what issues I may have to keep in mind. Thanks for the help.
Edit by Moderator: Thank you for participating in the forums. However, this topic has been covered in a recent post Here.