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Mark D
Mark D, Enrolled Agent
Category: Tax
Satisfied Customers: 1250
Experience:  MBA, EA, Specializing in Business and Individual Tax Returns and Issues
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I have a loan balance from the Retirement Plan is $3,056.28.

Customer Question

I have a loan balance from the Retirement Plan is $3,056.28. I have termed employment and if I don't pay this off, what would I be looking at to owe at year end on his amount?
Submitted: 7 years ago.
Category: Tax
Expert:  Mark D replied 7 years ago.
Customer

 

An unpaid loan against a qualified plan will be deemed a taxable distribution, subject to a 10% penalty unless you are age 59 1/2. You should count on paying regular state and federal income tax (at your rate) on this amount plus the 10% if applicable.

 

Regards,

 

Mark D

Customer: replied 7 years ago.
I knew that part. I was trying to figure out what else besides the 10%.. Thanks anyway
Expert:  Mark D replied 7 years ago.
Customer

 

The taxable distribution would be taxed at your ordinary income tax rate. If you are in the 15% bracket, you would pay 15% in income tax on the $3,056.

 

Regards,

 

Mark D

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