On One Hand: Yes, You Do.You must report a withdrawal from your 401k retirement account when you file your taxes, according to TurboTax. The income in your account is tax deferred, so you don't actually pay taxes on it until you make a withdrawal. When you do, the government taxes that withdrawal as regular income.On the Other: A 401k LoanOne way to use your 401k funds without having to pay taxes is to take a loan. According to MSN Money, there is no tax levied on a 401k loan if you repay it. However, taking a loan on your retirement account means that amount of money is no longer collecting interest, so it should be a last resort.Bottom LineYou have to pay taxes on all premature withdrawals from your retirement accounts, which means withdrawals made before you are 59 1/2 years of age. However, you can take a 401k loan out on your account, which the government does not tax unless you don't repay it.