By Jason Watson, CPA
Posted Saturday, November 5, 2023
401k plans may have loan provisions. This means you can borrow up to 50% of the account balance with a 2024 tax year hard ceiling of $50,000 (or 50% of $100,000+). This limit has not changed for several years. You are basically paying yourself interest on the loan.
401k plans can also buy life insurance, which is a neat way of deducting your life insurance premiums since the money going into the 401k plan may be pre-tax. There are all sorts of rules and limitations, but you should be aware of this option.
Jason Watson, CPA, is a Senior Partner of WCG CPAs & Advisors, a boutique yet progressive tax,
accounting and business consultation firm located in Colorado serving clients worldwide.
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