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theres a lot of frs special risk participants that must love paying more than their fair share in taxes they love paying taxes so much that theyre willing to pay income tax twice on the same dollars in their deferred comp plan the problem is most of these people have no idea that theyre doing this the storm is coming but im prepared ill be gone for a while but dont be scared so heres the deal and why youre paying income taxes twice when you take a loan against your deferred comp plan to begin with its important understand that unless your deferred comp plan is a roth deferred comp then all the dollars that are in there are considered to be pre-tax dollars that means it was funded through your paycheck before you incurred any taxes now when you take a loan against the plan you receive the money tax-free theres no withholding for taxes nor does the loan become income and forcing you to claim it on your tax return all good so far right but when you take that loan youre required