Quote:
Originally Posted by KELLYLYNN  you have to pay taxes on that money you take out, it's considered income... my husband company only paid the IRS a percentage of the taxes, i got nailed this year with 8,000.. to pay back, plus 130.00 per month with penities and interest... i will never borrow from his 401 K again..... so i just got into more dept. than i wanted too.... his company told him the taxes will be taken care of... YA RIGHT !!!!!!! i wish i knew that then... |
A friend of mine took a hard disbursement. She opted to take the taxable percentage (usually what you would have paid according to your tax bracket which tends to be about 28%) out at the time she got the money. So the money she requested she got 28% less at the time and the deducted amount went to pay her taxes. She once opted to wait and pay it at tax time but that is bad becuase you tend to get socked.
This is the third time I have taken loans from my 401k. Never had any tax issues becuase it was a loan and I was paying it back into my account with an interest rate of 5.8%. Never owed any money at the end of the year because it's not a hard disbursement.