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I withdrew 15,000 from my 401K this year and plan to pay it back. How can I go about doing this so I do not get taxed.

 
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3 Replies

I withdrew 15,000 from my 401K this year and plan to pay it back. How can I go about doing this so I do not get taxed.

Did you take out the money as a loan or did you just take it out and "plan" to pay it back?   How long ago did you take money out of the 401k?

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**
SusanY1
Expert Alumni

I withdrew 15,000 from my 401K this year and plan to pay it back. How can I go about doing this so I do not get taxed.

If you took this as a withdrawal (and not a loan), you can put the funds into a Rollover IRA (at a custodian of your choice) within 60 days of the withdrawal.  You must not have had any other IRA Rollovers within the previous 12 months (trustee-to-trustee transfers don't count in this.)  

If it has been more than 60 days, you will be taxed on the money unless you can show that you suffered a casualty, disaster, or some other event beyond your reasonable control.  This doesn't have to be a federal disaster, but you will need evidence to support that reasons beyond your control prevented you from making the rollover within the prescribed period of time.

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I withdrew 15,000 from my 401K this year and plan to pay it back. How can I go about doing this so I do not get taxed.

If you took a loan, it is mandatory that you pay it back via payroll deduction, usually with a mandatory time frame of 5 or 10 years.  If you leave service with a loan outstanding, you have 60 days to put the balance back into the 401k.  If you miss the 60 day window, you have until the tax deadline of the next year to deposit the money in a IRA as a "rollover contribution".

 

If you took a withdrawal, you have 60 days to either put the money back into the 401k or put it into a different IRA, both of these are considered types of "rollovers."

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