are loans from 401 k plans taxable
Not Taxable Income. A loan from your 401(k) will not be treated as taxable income and is not to be reported on your income taxes. You made the original contributions to your 401(k) with pretax dollars, and the tax on those contributions is deferred until you begin taking withdrawals after age 59 1/2.f plan participants may take out loans, the written plan description states that borrowing is allowed. Although withdrawals from a 401(k) by participants younger than 59 1/2 usually result in a penalty, loans from 401(k) funds do not trigger a penalty.