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Level 1
posted Jun 10, 2020 12:13:24 PM

Question re: Filing taxes after taking a loan against 401K plan

In 2019 I took out a loan against my 401K for a little over $20,000. I am paying the loan back over 5 years by payments that are automatically drafted from my paycheck. Filing of my taxes has always been pretty simple for me to do on my own, but I want to make sure I do not miss anything. Is there anything special that I need to do with regard to the loan?

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1 Best answer
Level 15
Jun 10, 2020 2:38:17 PM

As long as you are making the payments, there is no tax impact of a 401(k) loan. It doesn't get reported, you don't get any forms, you just ignore it. 

4 Replies
Level 15
Jun 10, 2020 12:15:37 PM

A loan from a 401(k) account is not reported on a tax return.

Level 15
Jun 10, 2020 2:38:17 PM

As long as you are making the payments, there is no tax impact of a 401(k) loan. It doesn't get reported, you don't get any forms, you just ignore it. 

Level 3
Feb 20, 2025 12:43:44 PM

what about deductions?

Expert Alumni
Feb 20, 2025 12:48:52 PM

There are no deductions associated with the loan payback. The moneys you put into the plan were from compensation that was exempted from tax until you withdraw it. The loan proceeds were not a withdrawal since you will pay them back. When you are done doing so you will affectively be in the same situation you were before you took the loan, so there is no additional deduction due you.