My husband is a "technical sales representative" for a company. He has a contract with his company that includes a "no-compete" clause if he should quit, he will be paid commission with a monthly draw and he is charged for all expenses, and if he would quit he must pay back any amount he is in the "hole". He and the other saleman have to split all of the branch office expenses. His employer pays up-front but then charges them back for branch office staff salaries, benefits, rent, mileage, office equipment, depreciation, utilities, everything. My husband is going to receive a W-2 as an employee for his draws and then only get to deduct 2% of his expenses. It appears his employer is taking the deductions for the expenses, even though the salespersons are being charged for them. My husband is in the "hole" $67K (commissions-draw/expenses) but we will be paying taxes on income of $48K even though his expenses outweight his income. Could someone explain if his employer is right?
2007-11-20
15:51:51
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5 answers
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asked by
Tammy O
1