Hello,

I am new here and grateful for any guidance. Our accountant suggested we post our question here.

We currently have to keep track of the nondeductible/deductible/pro-rata basis each year because of co-mingled funds from a recharacterization 10 years ago. We would like to clean it up so we can do Back Door ROTH conversions and avoid the future pro-rata bookkeeping.

We already have ROTH IRA and Trad IRA accounts set up for Back Door ROTH Conversions to keep the transactions clean and trackable (away from our other retirement accts). These Trad IRA accounts are zeroed out each year once the funds are converted to the ROTH accounts.

Husband has Trad IRA he’d like to roll-in to a workplace 401K (Plan allows). Our accountant thinks this will do away with the 8606 and 5498 reporting requirement going forward so long as this Trad IRA balance is $0 at the end of the year. Is this correct?

I also have a Trad IRA (no employer plan to roll into) that I would like to convert to a ROTH. I understand there would be taxes owed at the time of conversion. We think this would also clear away my 8606 and 5498 reporting requirement going forward. Is this also correct?  Can I avoid the 10% early withdrawal penalty if I do this as an “in-institution” conversion and never get a check in hand?

We understand that we would (likely) be giving up the tax benefit of the non-deductible portions of our Trad IRAs, but are willing to do so to eliminate the 8606 and 5498 paperwork.

Are there any “gotchas” we are missing in doing this?

Thank you again for any insight the community can provide!