Question: How many times was the money affiliated with the 401k loan taxed?
Answer: Twice.
LEX said:
Martha said:Yeah, but the loan money you borrowed is floating around never taxed.
kjpliny said:Nor is money you borrow from a bank for a normal loan. The purpose of a 401k account is to have pre-tax money grow tax-free until you withdraw it. By using it for a loan, in order to replace the money that was there, you have to pay taxes on the money you're replacing it with.
kjpliny said:I understand what you're saying and in fact it's correct when you compare a 401k loan to a normal loan. That doesn't mean you're not being taxed on the money twice, it just means you're not worse off than had you taken a normal loan.
But in absolute terms, you have to answer the following questions:
Question: When you repay a 401k loan (or any loan for that matter), is the money you're using to pay the loan after tax money?
Answer: Yes.
Question: When you take money out of a 401k plan at retirement, is the money withdrawn taxed?
Answer: Yes.
Question: How many times was the money affiliated with the 401k loan taxed?
Answer: Twice.
mathjak107 said:well think of it this way.. the money you took out of the 401k was never taxed. your income is taxed regardless anyway whether you take a 401k loan or not so you can think of it as merely replacing the untaxed money you took out. the same as if you took the 401k loaN decided you didnt need it and put it back... even though your income is taxed you wouldnt say the 401k money was being taxed 2x would you if you merely are putting it back ?
Martha said:What threw me off is the fact that the money has to eventually get taxed once way or another.
Awright, guys, I told you not to make me do this.retiredbop said:I wouldn't say she's hideous, nor carnivorous.
Tomcat98 said:she has done a good job of filling a niche
I like watching her on PBS
Nords said:Awright, guys, I told you not to make me do this.
All hands put down your beverages and swallow whatever you don't want to spew on your monitor.
Then scroll down.
Thank goodness it comes but once a year... or did you want me to go back to Google Images for more?Rich_in_Tampa said:Geez, Nords. It's Christmas, fer cryin' out loud .
Just out of curiosity, I wonder how long it took "DoNotSleep" to link & load all those photos. He has a real video-capture problem that borders on a stalking obsession...LEX said:I get all my money advice from this gal:
http://www.donotsleep.com/maria/photos.htm
mickeyd said:[snip]
I don't think that she has been on PBS for a few years now
You're technically correct, but PBS has been pounding the rerun keyboard pretty hard. She's been on Hawaii's PBS channel at least twice in 2006 alone.mickeyd said:I don't think that she has been on PBS for a few years now that she took her roadshow over to CNBC.
Nords said:
DRiP Guy said:.....sound, basic financial advice for the mostly finance-clueless younger generation....they need to hear it from someone, and since mommykins and daddykins apparently have capitulated.....
she is wearing more $$ than many of you are driving.