What’s the difference between withdrawing your 401k and taking a loan from your 401k?
Posted by Dolores
Erica T asked:
Is it possible to take a loan from your 401k with out having to pay taxes on it till 2010 taxes.
401K
Is it possible to take a loan from your 401k with out having to pay taxes on it till 2010 taxes.
401K
December 31st, 2009 at 11:20 pm
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January 1st, 2010 at 2:37 am
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yes, you can take loans from your 401 K but if you do not repay it, you will be taxed on it
January 3rd, 2010 at 6:00 pm
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under two circumstances, yes; to purchase a house; to repair storm damage.
January 4th, 2010 at 8:33 pm
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If you take out a loan you will not owe taxes now. If you pay back the loan you will never owe taxes on the transaction.
If you do not pay it back you will probably owe taxes but not always and not until later.
However, you should talk to the administrator of your 401k plan before you spend more time contemplating your decision. Your options are going to vary dependent on the rules set up by your plan. And if the money is from a previous employee it unlikely a loan will be an option. Also know that what you need the money for can affect both the tax penalties as well as what your plan options are.
January 7th, 2010 at 6:19 pm
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Some 401k plans will allow you to borrow from them. Loans are not taxable as long as u repay them within the terms of the original loan. Contact the record keeper of your 401k and simply ask, most can be processed thru the website.