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You are here: Experts > Business > Corporate Law > Tax Law (Questions About Taxes) > is my employer doing right
Expert: Glenn D Schnabel
Date: 9/7/2008
Subject: is my employer doing right
Question
has me as an w4 but all my pay is on my commission i pay all my expenses ges car lodging food but i only get my commission an i make over 150,000 per year an still get charged a .835 tax burden before my commission total is sent to payroll-paychecks inc. i just wonder if i am paying the total what or where is the .835 percent going is this legal ?
Answer
William,
Thank you for your question.
1)i just wonder if i am paying the total what or where is the .835 percent going is this legal ?
You are telling me they are taking out 83.5% in taxes on your pay?
I would say that if they give you a W-2 that you have to report your expenses on IRS from 2106 and that flows through itemized deductions and that is reduced by 2% of your AGI.
At the end of the year , they will report to you on a W-2 all the taxes and deductions they took for your pay. You should have this reported to you on your pay stub.
You may want to consider being on a 1099 and getting to take off expenses on your income directly. You have to weigh it between whether you would pay higher taxes as an employee or as a sub contractor. On one hand you lose $3000 deductions, but you don't have to pay the extra 7.65 percent Fica and medicare.
Hope this is helpful
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