loan from 401k
Hi Terry, by the way I watch you all the time on wgn am. thanks for the answer but I also asked my tax guy and he said I would not have to claim it as long as I was still working and paying on the loan but if I quit or got canned I would have to claim it? is he correct ? I thought if I took it I would have to claim it as you said now I am confused? thanks, geri
Terry Says
You said it was a WITHDRAWAL from your 40l(k). That withdrawal IS taxable in the year withdrawn. A loan is NOT taxable unless you leave the company. Then according to the rules of the plan, you may have 6 months to repay the loan or it becomes taxable. And make sure the company considers it a loan and not a withdrawal, or they will send a 1099.
