Debunking a Major Myth About 401(k) Loans
There are many good reasons to exercise caution when considering a loan against your 401(k) plan. Conventional wisdom has long argued that one of key disadvantages of a 401(k) loan is that it results in double-taxation: the participant repays the loan with after-tax dollars (the first tax), and the money is again taxed when it is taken out in retirement (the second tax).
However, according to 401kplanning.org, the issue of double-taxation is a myth and should not be a factor when considering the pros and cons of a 401(k) loan. Click here for their article, "Will I Pay Taxes Twice on a 401k Loan?"