looking to take hardship loan from 401k, received paperwork from mortgage company authorizing $4,000, change $4,000 to $8,000. Is this against the law? It's your own money, should be able to get it. Need to pay other money to creditors
2006-06-28 11:07:15 · 2 answers · asked by tomb 1 in Business & Finance ➔ Credit
If using hardship withdrawals for other non-house purposes is not allowed by your plan, your action is a violation of IRS regulations. Here are the possibilities.
1) You could be asked to immediately repay the $8,000, or possibly just the $4,000. If you are unable to repay, it can be deducted from your wages.
2) It could be reported to the IRS as additional untaxed income, causing your taxes to go sky high.
3) If you are in a position of authority, and you refuse to correct the problem, the plan could be "disqualified", causing taxes on all the plan money for the whole company to become due. As an alternate, the company may be liable for an initial excise tax of 15% of 4,000, and 100% of 4,000 for every following year unless it's corrected.
Don't mess with your retirement plan. It's REALLY bad news.
2006-06-28 11:43:18 · answer #1 · answered by Polymath 5 · 0⤊ 0⤋
The first answer is a good answer.
In short, yes it is. You are forging a document. You are probably committing perjury as well.
2006-06-28 13:29:59 · answer #2 · answered by PI Joe 5 · 0⤊ 0⤋