No. Interest on a 401k loan is not deductible, no matter what the money was used for.
One may also ask, does 401k loan show on w2?
You do not report your 401(k) contributions on your federal income tax return (except if listed on your W-2, then report under the W-2 section). Additionally, you do not report a loan from a 401(k) on your income tax return.
Just so, how do I report a 401k loan on my taxes?
401(k) loans are not reported on your federal tax return unless you default on your loan, at which point it will become a “distribution” and be subject to the rules of early withdrawal. Distributions taken from your 401(k) before age 59 1/2 are taxed as ordinary income and subject to a 10% penalty for early withdrawal.
Is a 401k loan simple interest?
The interest rate is the same regardless of your credit score, which is one reason why so many people find 401(k) loans tempting. … In this case, you’re paying interest to yourself, not to a bank or your employer. People like to call this transferring money from one pocket to another, but it’s not that simple.
Is a loan from 401k taxable?
Any money borrowed from a 401(k) account is tax-exempt, as long as you pay back the loan on time. … You do not have to claim a 401(k) loan on your tax return. As long as the loan is paid back in a timely manner, the interest attached to certain plans is the only tax consequence.