Quote:
Originally Posted by Bizzymammabee  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. |
i see what your saying, but i'll never borrow from a 401 k again... i'm getting out of this hole were in now, i have a very strick budget for the next 8 months until everything is repaid, i cut the credit cards up, and i pay for everything with good old CASH now, and if we don't have the cash we don't need it then, it can wait... His company did deduct and certain amount at the time of the loan, but what they did not explain to him is that there only responsible for a percentage of the tax payback and that HE had to make payment arrangement to pay the rest of the taxes owed, the one thing i don't understand is why it took the IRS almost two years to catch this, cause he got a tax refund last year, i guess they wanted the extra 130.00 a month in penilties and interest in there pocket,,, oh well i got it paid off, thanks to a family member that i borrowed the money off of with less of an interest rate than the IRS.... im just saying unless im really, really, hurting i rather go to a loan shark then my IRA... i almost died when i got that letter....