Ask Experts Questions for FREE Help !
Ask
    tacojuice's Avatar
    tacojuice Posts: 1, Reputation: 1
    New Member
     
    #1

    Feb 2, 2007, 12:10 PM
    401k loan
    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
    Fr_Chuck's Avatar
    Fr_Chuck Posts: 81,305, Reputation: 7692
    Expert
     
    #2

    Feb 2, 2007, 12:48 PM
    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
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,815, Reputation: 846
    Senior Tax Expert
     
    #3

    Feb 2, 2007, 10:39 PM
    Fr Chuck:

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

Not your question? Ask your question View similar questions

 

Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.


Check out some similar questions!

401K Loan vs. Home Equity Loan [ 3 Answers ]

I need $50,000 for a kitchen remodel. I can get a 401K loan 5 yr term 9.25 interest - total payments add up to 62,000 or so with a monthly payment of roughly $1,050. That payment is is tough on my current budget so I was considering a Home Equity Loan with a longer term. I know there are a...

Loan against 401K [ 1 Answers ]

My 401K is still with :confused: my employer for one year and a day after my resignation. How can I obtain a small loan (3K). The year is almost up but I need the cash now!:confused:

Cashing out a 401k with a loan [ 1 Answers ]

I currently have a loan I am paying back to my 401k and am thinking about cashing out, but I'm not sure if this is possible or not. This might not be a good idea because I'm guessing the loan would be considered part of that cash out, which means I'd be paying taxes on money I won't even be seeing...


View more questions Search