If you took a loan out from your 401k do you have to file it on your tax return?

[DoninGA · Accepted solution]

If you took a loan out from your 401k do you have to file it on your tax return?

No.  Loans from a 401(k) account are not reported on a federal tax return.  If you default on the loan or are separated from the company without paying off the loan, then it is a distribution and you will receive a Form 1099-R.  The 1099-R is reported on a federal tax return.

[Jesse_Sanchez]

Thank you

[somdgirl63]

I took a loan out of my 401K and then lost my job.  I owe less than $10,000.  I know this need to be listed as income.  However, I also took money out of my Roth IRA (not 59 1/2).  Why must the Roth IRA be claimed for taxes if taxes were already paid?

[DianeC958]

Yes, it needs to be listed as income on your tax return if you received a 1099-R for the amount. 

If it is a Roth IRA, any amount you contributed to the Roth IRA will not be taxed. 

Depending on how long you had the Roth IRA account there may be a 10% penalty for early withdrawal.  There also may be tax due if earnings were withdrawn.

The information needs to be reported on your return to make sure there is not a penalty due on the distribution or tax on the earnings.

To enter your 1099- R in TurboTax Online or Desktop (you may need to upgrade to report these distributions), please follow these steps:

1. Once you are in your tax return, click on the “Federal Taxes”
2. Next click on “Wages and Income” 
3. Next click on "jump to full list" or “I’ll choose what I work on”
4. Scroll down the screen until to come to the section “Retirement Plans and Social Security”
5. Choose "show more", then IRA, 401(k),Pension Plans (1099-R) and follow the onscreen instructions

@somdgirl63

[tcrumedy7]

Hello, I defaulted on two loans during 2020.  However I paid back one in full during 2021 and half of the other during 2020.  I received a 1099-R for both loans in the full amount taken from my 401K plan. Do I still have to add both amounts of the loans in the full amount to my gross income when filing my 2020 taxes.