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You are here: Experts > Business > Corporate Law > Tax Law (Questions About Taxes) > Commissions
Expert: Glenn D Schnabel
Date: 10/10/2008
Subject: Commissions
Question
I am in sales and would like to begin not having taxes taken from my commission checks each quarter. I understand the risk, but every year when we complete our taxes we get a huge refund and due to the low level of commissions there should be very little effect on my tax return. I am being told that it is required that taxes be taken out by law. However, to the best of my knowledge the government could care less how they get their taxes as long as they get them. What is the real answer?? HELP!! Thank you for taking the time to look into this.
Answer
Christopher,
Thank you for your question.
1)What is the real answer??
The real answer is that the employer could get in trouble if he issues a W-2 and takes 0 taxes out. At a minimum he has to take out Fica and Medicare. You can fill out a W-4 and have him take out less taxes based on the deductions you want to claim.
Remember that getting a big refund means that you gave the IRS an interest free loan.
You do not want him to treat you as a 1099. You would be liable for the self employment taxes, which amount to 15.3 times the self employment income.
Hope this is helpful.
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