In this regard, do you have to claim a 401k loan on your taxes?
Any money borrowed from a 401(k) account is tax-exempt, as long as you pay back the loan on time. And you’re paying the interest to yourself, not to a bank. You do not have to claim a 401(k) loan on your tax return.
Similarly one may ask, does the interest you pay on a 401k loan go back to you?
Any interest charged on the outstanding loan balance is repaid by the participant into the participant’s own 401(k) account, so technically, this also is a transfer from one of your pockets to another, not a borrowing expense or loss.
What happens if you have a 401k loan and get fired?
Here’s the risk: If you’re fired or lose your job, you have to pay back the loan immediately. Typically, the remaining balance on the loan is taken as a distribution to pay the outstanding balance.