Navillus1968 wrote: Mon Oct 13, 2025 7:11 pm
Just code the Fidelity deposit form for the $1k check as “Roth conversion” instead of “60-day rollover” to ensure that your Form 5498 gets filled out properly.. If you check “60-day rollover,” Fidelity will put $1k into F5498 Box 2 “Rollover contributions”, when you want the full $10k Roth conversion shown in Box 3 “Roth IRA conversion amount.”It’s confusing, because you are doing a transaction that is both a 60-day rollover and a conversion, but the Roth conversion is what needs to be recorded on the F5498.
I was in this prior discussion too, but have learned a bit in a couple of weeks which feels like years already on this subject.
Navillus is generally spot on but there are some refinements I’d offer.
1) Don’t check the 60-day Rollover, check exclusively Roth Conversion on the paper deposit slip.
2) Fidelity will code it as a 60-day Rollover and report in Box 2 even though you know it was a Conversion.
3) If you only do it once every 366 days or longer it’s fine and moot, you code it properly via your Form 8606 and staple or scan your deposit slip as your backup.
4) If you do it more than once in any 365 day period, you are probably still fine but there’s risk, as indirect rollovers are limited to one per 365-day period counted since the last one.
5) Because you want to do it annually, Indirect 60-day rollovers which is how they code it on the 5498 gets reported to the IRS in May (Not Jan-Feb) and there will be an ambiguous apparent mismatch because Fidelity did not report it as a conversion which we know it is (and you do your taxes, not Fidelity). The IRS according to everyone that has actually done this operation is ignoring the 5498 and going by your 8606 for which you have the proof if ever asked.
So many who do this say “Done.”
6) Do not discuss any of these operations with Fidelity because they will likely make your life miserable if you try to correct them. In fact, contrary to what I believed in the original post before, I now am of the understanding that it is 100% compliant for Fidelity to report it as a rollover and keep in mind they could disallow what you are doing if you push too hard.
7) This is important because you need to make the withholding and you can only do that by calling them. That’s because they want to save you from using the converted funds to pay the tax which is usually unfavorable tax wise, and they are afraid you’ll be pissed off if you do it online due to misunderstanding. Now if you do a conversion online, that conversion is done in that day and closed and complete in your keystroke. That’s where the indirect conversion comes in – you make it complete after the delay when you deposit the gross of the conversion no matter how much was withheld. So not finding withholding online is a godsend for anyone making the mistake of withholding a direct Roth conversion. All online are direct conversions! Hence you call them and let them tell you it is not a good idea to withhold, but you tell them withhold X%. I would limit it to 99%. You might get away with 100% but Fidelity has 99% max on one of the screens even though they can do 100%.
8) You have the option after the fact of demanding Fidelity recode it and issue a corrected 5498. Remember that is not generated till after tax day in May. I highly recommend you don’t as everything I’ve heard points to them not correcting it and there is the point that you don’t want them to bungle the who thing thinking you are doing something they are not allowed to do.
9) This is specific to Fidelity. If you have another custodian comments were that some are a joy to work with.
10) If your numbers are ballpark, it is probably not worth dealing with any of this for $70 (a generous return vs. holding $1000 for less than a year). I suspect they are not ballpark
