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401K Loan

I have recently been laid off and have an outstanding 401K loan.  My questions are, how can I prepare for the tax implications?  Are there any government provisions for this situation because of the economic crisis?  Thank you in advance for any assistance on this.

 

Rosa


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Currently, there are no tax breaks offered for this situation.  That could change, but I haven't seen anything in print that leads me to believe that anything is being considered.  The loan will be treated as a distribution.  Try not to add to the pain by taking more money out of your 401k this year if you can avoid it.  The distribution is subject to a 10% penalty unless you are over 59 1/2 as well as the income tax at whatever bracket this addition to your income will put you in.
Posted 2009-11-08T05:10:26Z
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