Just thinking out loud here....what if I can withdraw money from my 401(k), pay it back in three years to get the full refund in taxes, use the 401(k) money to offset increases in contributions to 401 (k) reducing my taxable income during the same three years? Possible?
ThE_RiPpEr. wrote:
“Just thinking out loud here....what if I can withdraw money from my 401(k), pay it back in three years to get the full refund in taxes, use the 401(k) money to offset increases in contributions to 401 (k) reducing my taxable income during the same three years? Possible?”
Good question.
If you take a tax deferred 401K or similar loan, you pay it back with taxable income. Covid-19 has temporarily relaxed some rules in this area, but they aren't permanent. If you want increased flexibility withdrawing from retirement accounts, you should explore Roth IRA's and Roth 401K's if your company offers it..