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    Nelly51's Avatar
    Nelly51 Posts: 3, Reputation: 1
    New Member
    		  
    #1

    Apr 10, 2008, 08:26 AM
    401K Loan Defaults
    Hi - My husband and I had to default on our 401K loan of about $45,600. I'm figuring about 38 % for taxes? About $17,400?
    ScottGem's Avatar
    ScottGem Posts: 64,966, Reputation: 6056
    Computer Expert and Renaissance Man
    		  
    #2

    Apr 10, 2008, 08:28 AM
    If you default on the loan, it becomes considered an inservice withdrawal. So there will be a 10% penalty. The total defaulted balance will be added to your taxable income to determine the taxes you owe.
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