borrowing from life insurance policy

[accentone]

Borrowed the money. Question: I think I may have more than I need. I WILL be careful to keep all reciepts as to where it is going. If I have $$ leftover from this, should I send it back to the insurance company before filing?

Thanks.

[Jason10488]

I have requested a loan against my 401K as well to pay for the lawyer (and get caught up on house/cars etc). Should be filing in the next 2 weeks. I understand the 401K repayment will not be allowed as an expense, but I am don't understand what you mean about it being taxed and penalized?

Any help would be appreciated.

Thanks!

[hhou812hh]

I have requested a loan against my 401K as well to pay for the lawyer (and get caught up on house/cars etc). Should be filing in the next 2 weeks. I understand the 401K repayment will not be allowed as an expense, but I am don't understand what you mean about it being taxed and penalized?

Any help would be appreciated.

Thanks!

No you won't be taxed or penalized unless you leave your job for any reason before the loan is paid. If you lose your job your employer will take the 401k amount that you borrowed, so instead of you rolling it over tax free to an IRA, you will pay 10% penality plus it will be added to your income for the tax year.

Do yourself a favor and pay this back 1st after you are discharged or the cycle of not getting ahead will never end!

Good luck!