This is similar to my son. He reads at a 3-4th grade level and math skills are grade 1-2. We accelerated him from prek to k about a month ago and it has been great. The work is still easy for him but he is learning new things and the other kids in the class can at least read. He will start 1st grade next school year at age 5. We decided we wanted to try public school first and see if it worked. Our public school would also only give "extra" work which is why we decide to try acceleration. I still have homeschooling as a backup in my mind but I think this might work out for us. He's very happy in kindergarten right now. I guess my opinion is try things and see what works for your family. Otherwise you will never really know. You can always change the plan =]. Good luck!!
