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Bschade3

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  1. I guess where I am getting confused is that if I have until 2020 to roll the 401K plus loan over, but fail to do so, that failure would occur in 2020 and then be reported to the IRS in 2020, correct? If I file my taxes for 2019 on April 15th, 2020, how is the iRS notified that I defaulted on the loan at the same time I am filing my 2019 taxes? I was under the assumption (which sounds like its an incorrect assumption) that this would be reported at the time of default, which would be either April 15th, 2020 or October 15th, 2020 if extension is filed. Is it that the IRS would expect me to file an amendment to my 2019 return if I default on April 15th 2020? Sorry for my ignorance, but I am so confused. Thank you so much for taking your time out to explain this to me. It is so much appreciated.
  2. Thank you so much Tax_Counsel. You have been a great help. So....If I roll over the monies into the IRA that you speak of, the the 2017 tax laws take effect and I would not need to pay the penalties until 2021 (for 2020 tax season) correct?
  3. Adjusterjack - I understand the loan repayment rules are made by the IRS....but if I a able to pay the loan monthly, which is an option that some companies allow so I know this is possible, all would be good. I am not looking for a freebie here, just fairness.
  4. I just can't believe that incompetence gets the upper hand again. I can't even get a burger made without it being wrong. The younger generation just doesn't care and they go wrecklessly around providing wrong information....but that is OK I guess. RetiredinVA - Yes....I told them that I was leaving immediately. I asked Prudential for the taped phone call but they are unwilling to provide it as they said they can't do that. Not sure why as it is my voice on it.
  5. I currently have an outstanding primary residence loan taken on my 401K. Prior to leaving my employer, I called Prudential to ask if it was possible for me to continue payments on this loan if I were to leave the company as this was a big part of my decision-making process. Being that the loan is still $19K outstanding, the penalties for me going int default (early withdrawal 10% plus the addition of income) would outweigh the benefits of the new position I wanted to take, I needed to know if this was possible. The agent told me "yes." They would send me a coupon book upon leaving so I could continue to pay on the loan for the life of the loan. After this information, it was made clear to me that I could make my move without any loan penalties. I thanked her and actually indicated to her that she made that decision for me and thank you! Fast forward to me in my new position with my new employee two three weeks later. I get a call from Prudential that the last agent I spoke to was incorrect and that I would need to pay the loan off prior to years end if I wanted to avoid the penalties. I explained that I made my decision partly/mainly based on the information the previous agent had told me and that this should not be my burden now being that I was told something completely wrong. They went back and reviewed the taped phone call and said that I was correct in that the agent made a mistake, but she assumed I was staying with the company, but going over seas and that the 401K plan had this provision set for such a situation. Wait....what???? I never even came close to giving that indication to the initial agent. Now....the new agent tells me that there is nothing they can do. I continued to state that this, in no way, was my fault and Prudential now needed to step up and allow me to make payments to the loan. They said there is nothing they can do and that I need now pay the penalties and the extra taxes. I am at a loss. What are my options here? They can't just tell you wrong information, allow you to base your decision on that information, then go back and say "oops.....sorry", can they? Do I have any legal recourse? Any help would be greatly appreciated.
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