Author Topic: Taxes on comission?  (Read 1514 times)

cbr shadow

  • Bristles
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Taxes on comission?
« on: June 12, 2013, 03:31:03 PM »
My wife just got into sales and has had some significant comission's and bonuses.  I notice they're all taxed high, like 40%.  I've heard in the past that we get taxed on that income like any other income, so should we expect the difference in our tax return?
OR are bonuses/comission just taxed higher?

freelancerNfulltimer

  • Stubble
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Re: Taxes on comission?
« Reply #1 on: June 12, 2013, 03:33:49 PM »
Do you mean they are taxed higher or that they withhold more?

TLV

  • Bristles
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Re: Taxes on comission?
« Reply #2 on: June 12, 2013, 05:01:05 PM »
At my employer, bonuses always have 25% withheld for federal instead of being calculated based on the W4. Combined with 7+% for social security and medicare, and any state income tax you may have, that could add up to ~40%.

They aren't actually taxed more, just withheld at a higher rate, so you'll get the difference back when you file your return.

If you can predict the bonus amount fairly well, you can take it into account with the IRS Withholding calculator and reduce the tax that is withheld on your regular pay to compensate.