This is super helpful @fanfare - thank you!
Can you clarify, "You can't expect all your withholding back"? I would definitely expect to get these funds back somehow. Here's why:
- 401k has 100k, which I borrow, leaving $0 in my 401k
- There is withholding on that 100k, so I ultimately received $64,800
- Now I'm paying it back, which I have to pay in full at 100k.
- My 401k is now fully repaid to 100k
- However, that original withholding (~$35,200) is still with the IRS, which I've now repaid, so I'd expect it to be refunded to me.
What am I missing?
