My husbands boss paid him a commission check without taking takes out. what should we do?

Answer 1

You wont have to do anything, When you pay your taxes next year, the taxpreparer will take care of it......... dont worry......... we had to do that when my husband was hurt and off work.... they didnt take taxes out............well the next year on our taxes we didnt get as much back..........which was ok.....

Answer 2

Most of the answers you've gotten so far are shaky at best.

If he is being paid without taxes being taken out, he's being treated as an independent contractor. He'll owe around 15% for self-employment taxes (social security and medicare) in addition to whatever income tax he will owe - that amount depends on his total income and your overall personal situation, so there's no way to estimate that. He should be filing quarterly estimated returns on a 1040ES and paying taxes quarterly - then at the end of the year when you file your annual return, all the income and estimated payments will go on a 1040, a schedule C and a schedule SE.

You'd be wise to see a CPA soon, well before tax time, to find out what kind of records he should be keeping and what items he might be able to deduct.

He will likely get a form 1099 at the end of the year from the company he's working for, giving some of the info needed to prepare his taxes.

I'm assuming that either this was his first check, or that his other checks haven't had taxes taken out either. If he's been getting checks with taxes taken out until now, and suddenly got one without any withholding, he should ask his boss or payroll department what is going on.

Answer 3

If your husband is an employee, then it is illegal to NOT take taxes. Are you talking about all taxes? If there is no federal tax but there is social security and medicare, then that would indicate that you husband may have claimed exempt status or the amount of the check for the time period it was earned put him into a bracket that there would be no taxes taken. If your husband is hired on as a sub-contractor, or outside sales (something to that effect) he will never have taxes taken out, social security/medicare or FIT alike. This means that he will be issued a 1099 at the end of the year. You will then have to claim the monies as income with no taxes paid to either the IRS or social security.

Answer 4

Either ask the boss to re-issue it or declare it as additional income on your return. If that doesn't work, then just check at the end of the year to see if it was included in the W-2 or if you get 1099'd. It's best if it is included on the W-2 because the employer has to pay a portion of the FICA. W-2 income will just be entered as salary. 1099 income will have to be entered as miscellaneous income and there might be self-employment tax.

Answer 5

Kinda standard to do that...same with bonuses, etc. If you can, make a xerox of the check before cashing it and put it in an envelope somewhere for Tax Time so you won't have to depend on your memory. You'll have to declare it with your other income--there's even a little line in the tax return asking if you received any commissions or bonuses. It won't be with his regular income from work [won't be folded into the earnings statement he'll get in January, since it's not 'salary'] it's in a different category - but it still has to be added in for the year. The Boss will list it as part of his general out-go expense or whatever--so it can't really be hidden away from the Tax Monster. Nothing for you to do right now, just keep a copy of it somewhere for when you file next April.

Answer 6

Set aside a minimum of 25%, to a max of 35% in a savings account.

Leave this money alone, as your going to need it at years end. Don't think Uncle Sammy won't find out about it.

Also have hubby get with his boss and let him know that income tax with holding didn't happen. Just a little CYA.

Answer 7

I think you have to pay some estimated tax now. Otherwise you may have a penalty when you do your taxes if you grossly under-withheld even though it's not really your fault. You could also have his deductions changed so more is taken out on his paychecks through the end of the year so the "correct" amount is paid by end of the year (eg. withhold more until Dec 31).

Answer 8

Well you will be liable for those taxes at year end and probably payroll taxes on it as well. His boss should have withheld FICA and Medicare taxes and he will also be liable for those. Not a good way to do business. You can make an estimated tax payment if you wish but as long as you had more taxes withheld this year than last you won't incur any penalty. If you husbands boss sends you a 1099 instead of including it on his W2, he is skirting the tax laws.

Answer 9

Taxes are not taken off on Commision Checks. You have to file a form separately for Commision and the percentage is usually 35%. Usually you pay the tax every three months and then at the end of the year, you do the deductions, etc.

Call your accountant for the exact tax form (i forgot) and when he should pay the taxes.
Also if he's in sales, then many of the expenditures are deductable (ex: if he uses his own car to meet clients, then his car expenses - gas, insurance, maintenance, etc are deductable, if he treats clients to dinners, thats deductable, as well as office supplies etc.,)

Answer 10

Legally, if you are paid for work or sales without taxes withheld, you should report that money as miscellanious work income on your 1099.

The most prudent step would be to alert your boss that taxes were not withheld, and ask for an explanation.

Answer 11

You are going to owe money on that commission sooner or later. Uncle Sam will let you know in April how much you owe. In the meantime, be sure to stow away some of that money and don't spend it all. You will need it come tax time.