Is there still a penalty involved if it's for school only? No dorm or anything other classes and books. Thanks
2006-10-19 08:59:34 · 4 answers · asked by rhonda w 2 in Education & Reference ➔ Financial Aid
If your plan allows it you can take a loan or a hardship. If you take a hardship then you will have to pay taxes and a penalty. If you take a loan and you dont repay it then it will be 1099r to you and then you will have to pay taxes and penalty. However I dont recommend you do either and find another way to pay for your college.
2006-10-19 09:02:31 · answer #1 · answered by CJM 3 · 1⤊ 0⤋
There is normally a 10% tax rate to whatever amount you borrow. Its because you borrowed against earlier than a certain age, I believe thats 65. They will either taek that amount off the top or send you a form to file it at the end of the year. Thats your choice of course! Good Luck
2006-10-19 16:03:48 · answer #2 · answered by peacfulwar 3 · 0⤊ 0⤋
It would be much better to take out a student loan than borrow from a 401k plan. The interest rates on student loans is much lower than you think and you can possibly write off the interest on your taxes.
2006-10-19 16:18:39 · answer #3 · answered by FinAidGuy 4 · 0⤊ 0⤋
Yes you can, but that is a huge mistake. All the financial experts recommend that you do not borrow form your 41K. Can you just charge it on a credit card and pay it off?
2006-10-19 16:02:02 · answer #4 · answered by princesscutesmile 5 · 0⤊ 0⤋