http://www.moneyunder30.com/how-to-take-a-401k-loan-and-why-you-shouldnt Simple, Honest Financial Advice Thu, 09 Feb 2012 22:53:06 +0000 hourly 1 http://wordpress.org/?v=3.2.1 http://www.moneyunder30.com/how-to-take-a-401k-loan-and-why-you-shouldnt/comment-page-1#comment-14898 Shaun Sat, 17 Dec 2011 10:32:24 +0000 http://www.moneyunder30.com/how-to-take-a-401k-loan-%e2%80%93-and-why-you-shouldn%e2%80%99t#comment-14898 It is not true that the money is taxed twice (you could make a case for the interest being taxed twice depending on your plan). But say i took out a loan 10,000 from my 401k then the next day I paid it back with the same money. Did I get taxed twice in this scenario when i take out that money in retirement? Clearly no taxes were only applied once to the money in that scenario. Think of it this way if you borrowed from the bank and paid the bank back with after tax dollars were you taxed twice? just because youre paying back a loan you took pretax from yourself with post tax dollars doesnt mean that money is getting taxed twice because the loan amount never gets taxed. It is not true that the money is taxed twice (you could make a case for the interest being taxed twice depending on your plan). But say i took out a loan 10,000 from my 401k then the next day I paid it back with the same money. Did I get taxed twice in this scenario when i take out that money in retirement? Clearly no taxes were only applied once to the money in that scenario. Think of it this way if you borrowed from the bank and paid the bank back with after tax dollars were you taxed twice? just because youre paying back a loan you took pretax from yourself with post tax dollars doesnt mean that money is getting taxed twice because the loan amount never gets taxed.

]]> http://www.moneyunder30.com/how-to-take-a-401k-loan-and-why-you-shouldnt/comment-page-1#comment-6714 CD Fri, 20 Aug 2010 20:31:45 +0000 http://www.moneyunder30.com/how-to-take-a-401k-loan-%e2%80%93-and-why-you-shouldn%e2%80%99t#comment-6714 You aren't being taxed for the portion of the loan you pay back - but for the portion you DIDN'T pay back. In the example above, the taxes recovered were for the $8000 that weren't paid when that money was deposited in the 401K account. You aren’t being taxed for the portion of the loan you pay back – but for the portion you DIDN’T pay back. In the example above, the taxes recovered were for the $8000 that weren’t paid when that money was deposited in the 401K account.

]]> http://www.moneyunder30.com/how-to-take-a-401k-loan-and-why-you-shouldnt/comment-page-1#comment-3458 CB Thu, 29 Oct 2009 21:57:00 +0000 http://www.moneyunder30.com/how-to-take-a-401k-loan-%e2%80%93-and-why-you-shouldn%e2%80%99t#comment-3458 Is this true? When you pay back the loan you are paying it back with after tax dollars instead of pre tax dollars. So when it comes time to withdrawl for retirement, you get taxed again? Is this true? When you pay back the loan you are paying it back with after tax dollars instead of pre tax dollars. So when it comes time to withdrawl for retirement, you get taxed again?

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