I lost my job in June 2023 and I had 2 outstanding 401K loans. Unfortunately I could not secure a job until 2 months later and had to use severance to pay bills instead of paying these loans back. Looking at my overall tax burden for 2023 the 401k loans $33.5K will be ordinary income and my overall income will be over 190,750 with standard deductions which is the 22 to 24% tax liability line. I am receiving a bonus from the company i left of approximately $4K by my calculations it would be less taxes paid if I paid back the smaller loan 0f $6800 than putting it in a tradition IRA that my wife and I have. If I pay the loan back the tax burden goes from $8110 to $6581. However if I max the IRA the tax burden is $7010. I would think it should be the same. I would be under the 190,750 after either scenario however the calculation is $10,294 plus 22% of the amount over $89,450 to 190,750. My question is does this make sense to payoff the loan to decrease my tax burden rather than the IRA? Just want some confirmation I am making the right decision. If there is another scenario that I am missing please advise.