When you contributed originally, that was pretax

When you pay back your loan via payroll deductions, that is after tax = because you already got the pretax deduction originally.

If you leave employment for any reason (resignation, laid off, termination, etc) you will have 60 days to pay back the loan. If you do not pay the loan back in that time, it becomes a distribution and you will get a 1099-R showing the money. When you do your taxes you would be penalized 10% on this distribution.

When you contribute to your 401k week to week or however you get paid, it comes out of your check PRE-TAX. In other words it is put into the 401k without taxes taken out, it comes out of the gross pay amount so if you borrow against the 401k you WILL have to pay taxes on what you took out because it wasn't taken out before it was put in. THERE IS NO WAY AROUND THIS EITHER because the 401k company is going to submit the information on their end to the Government so you will have to on yours too.

Taxes are only due if you default on the loan. Defaulting on a 401k loan is equivalent to taking a distribution. If this loan default/distribution happens before retirement age, you could be hit with an early withdrawal penalty as well.

Its a loan and you are paying interest.it is not income so you do not pay taxes

As long as it's a loan and you are repaying it, it's not income.

If you default (as in lose your job and can't pay it back), then it's income.