My husband took a LOAN for $3000 from his 401k in August. He has and will continue to have approx. $15 a week taken from his paycheck over a 5 year period. There is an interest rate of 9.2 percent. He has not received a 1099-R. Should he have? How do I handle filing 2006 taxes?
Thank You

A loan from a 401K is not like taking money out. From time to time I borrow against my account for special things when I need short term finance. If I stop paying back the loan, then it is considered a withdraw but not as long as you do not default on the payments

It should have no effect on income tax filing as long as it was a LOAN and not a withdraw

I am sure Atlanta Tax will be here shortly to confirm this also, and perhaps explain it in better tax terms

Fr Chuck:

I have nothing to add. Your explanation was exemplary! :-)