S All asset categories end 2003 with positive returns - American ...

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FEBRUARY 2004 PlanBITS 1099Rs sent automatically with distribution checks Employees who take an in-service withdrawal or distribution from their 401(k) account should note the 1099R form is attached to their check. They will need the 1099R when preparing their tax returns for the year in which they took the distribution. Replacement 1099R forms are available through the Charles Schwab Trust Company for $5. Contact Customer Service for more information. Milliman USA welcomes Justin Ingraham Please join Milliman USA in welcoming Justin Ingraham to the GeoVest Plan service team. Justin joined Milliman February 9 as a Customer Service Representative. Look for Milliman at AAPG Annual Meeting Milliman USA representatives will be attending the AAPG Annual Meeting in Dallas, Texas, on April 18-21, 2004. You are welcome to stop by the booth to visit about the GeoVest Plan, or attend the interactive presentation and discussion regarding this valuable AAPG member benefit. Update Employee Benefi t News for Members of AAPG page 4 Interest on 401(k) loans not tax-deductible A as employees prepare their 2003 tax returns, some may question whether or not they can deduct the interest they pay back to their accounts on a 401(k) loan. Here’s what you should tell them. A loan taken from your 401(k) account is not tax-deductible. This is the case even if the purpose of the 401(k) loan is for the purchase of a home. Interest paid on a mortgage or home equity line of credit may be tax-deductible because your home is being used to secure the loan. In the case of a 401(k) loan, your 401(k) account is used to secure the loan. Remember, you are already getting a tax advantage when you put money into your 401(k) plan, since these contributions are taken out of your paycheck pretax (i.e., before regular income taxes are taken out). When you are considering taking a loan from your 401(k) plan versus ob tain ing a loan from other sources, wheth er or not the interest is tax-de duct ible is just one of the factors that will affect your decision. Also con sid er: l Interest paid back on your 401(k) loan is paid back to your own account rath er than to a bank or other in sti tu tion. l However, unlike your 401(k) sala ry de fer rals, you repay your loan with after-tax dol lars. When you with draw this mon ey at re tire ment, it will be taxed again, and you will es sen tial ly be pay ing tax es twice on the same mon ey. l The interest you pay back to your ac count may be less than what you could otherwise have earned through your 401(k) investments. You also lose out on the com pound ing earnings you would oth er wise have received on the money you borrowed. l If you leave your employer, the entire outstanding balance on the loan is due within 60 days. If you don’t pay it all back, you will have to pay taxes on the balance plus a 10% penal ty if you are not 55 at the time of termination. Answer to puzzle on page 6: Good business leaders create a vision, articulate the vision, passionately own the vision, and relentlessly drive it to completion.
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