Hello, For about 6 months, I was out of work getting chemotherapy and radiation therapy for cancer. Thankfully, my last PET scan was clear of any more cancer. My question is that during that time I defaulted on a loan I had taken from my retirement plan. I have received a 1099 form for the balance of the loan and want to know how to add that to my income. Is there a penalty? Is there an extra tax? I'm not sure how to proceed. Thank you,
Betsy
I've already tried...
Answers
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Paul Thode has many years of experience preparing taxes. In addiion he has many years of accounting experience, ranging from Assistant Controller to Chief Financial Officer of a publicly traded company. He has a Bachelors in Managerial Economics from the University of California, Berkeley. He has a Master's in Accounting from Golden Gate University. He has an MBA in Finance from Golden Gate University. View Profile
It will be taxable and depending on your age, may be subject to penalty as well.
If you are over 59 1/2 there would be no penalty.
If you are under, there would be, but perhaps some of it would be waived if you spent the money on medical bills.
You should see a tax pro about this.
Best regards,
Paul
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