I'm earning sales commissions from my company - how do I report this to the IRS?

This is actually pretty common! The answer depends on how your employer classifies these commission payments. If these commissions are considered part of your employment, they should be included on your W-2 at the end of the year along with your regular wages. In this case, you wouldn't need to do anything special - just file your taxes as you normally would with your W-2. However, if your employer is treating these commissions as independent contractor payments, they should provide you with a 1099-NEC (Non-Employee Compensation) form instead. This would mean you're effectively doing this sales work as self-employment, which has different tax implications. The fact that your boss isn't withholding any taxes makes me think it might be the second scenario. You should definitely ask your boss directly how these payments are being classified and whether they'll be on your W-2 or if you'll receive a 1099-NEC.

After dealing with a similar situation last year where I got hit with unexpected taxes, I started using taxr.ai (https://taxr.ai) and it's been a game changer for handling my mixed W-2 and commission income. The tool analyzed my payment structure and automatically flagged that I needed to make quarterly payments to avoid penalties. What I liked best was that I could just upload my payment receipts and it would tell me exactly what I needed to report and when. They have this specific feature for people with mixed income sources that helps you track everything in one place.

Just wanted to update after trying taxr.ai from the recommendation above. I was skeptical but it really helped clarify my situation. Turns out my "commissions" were actually being treated as 1099 income without me realizing it! The system flagged that I needed to be making quarterly payments and helped set up the schedule. It also identified about $2,800 in deductions I could legitimately claim related to my sales activities that I would have completely missed. The interface is super straightforward even for someone like me who gets anxious about tax stuff. Definitely worth checking out if you're in a similar situation with mixed income types. Saved me from what would have been a nasty surprise next April.

If you find out you're getting a 1099 and need to contact the IRS with questions, good luck actually reaching someone! I spent HOURS on hold last year trying to get clarification about my commission reporting. I finally discovered Claimyr (https://claimyr.com) which was honestly a lifesaver. They have this system that basically waits on hold with the IRS for you, then calls you when an actual human picks up. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c I was super skeptical at first but it actually worked - got through to an IRS agent who helped clarify exactly how I needed to handle my commission payments and set up my quarterly estimates. Saved me literally hours of hold music torture.

I owe everyone an apology about my skeptical comment on Claimyr. After tax questions piled up about my commission situation, I got desperate and tried it yesterday. I was SHOCKED when I got a call back in about an hour connecting me to an actual IRS person. No waiting on hold forever listening to the same terrible music and messages. The IRS agent answered all my questions about how to handle commission income properly. For anyone wondering - if your employer doesn't withhold taxes from commissions and you'll owe more than $1000 at tax time, you probably need to make quarterly estimated payments using Form 1040-ES. The agent walked me through the whole process. Saved me hours of frustration and potentially penalties down the road.

Has anyone dealt with commissions that vary widely month to month? My sales commissions can be $500 one month and $3000 the next. Makes it super hard to plan for taxes, especially if I need to do these quarterly payments.

I know I'm late to this conversation but wanted to add something important - ask your employer about an IRS form called a W-4. If these commissions are part of your regular employment (W-2 income), you can adjust your W-4 to increase withholding from your regular paychecks to cover the taxes on your commissions too. That might be easier than doing separate quarterly payments!

Great thread everyone! As someone who's been through this exact situation, I wanted to add a few practical tips: 1. **Keep detailed records** - Whether your commissions end up being W-2 or 1099 income, track every payment with dates and amounts. I use a simple spreadsheet but even a notebook works. 2. **Set aside money immediately** - I learned the hard way to put 25-30% of each commission payment into a separate "tax account" right when I receive it. This prevents the shock of owing money you've already spent. 3. **Consider estimated payments even for W-2 commissions** - Even if your commissions are W-2 income, if they're large enough, your regular withholding might not cover the extra tax burden. Better safe than sorry with penalties. The key is getting clarity from your employer ASAP about how they're classifying these payments. Once you know that, everything else falls into place much easier. Don't stress too much - this is a common situation and totally manageable once you understand the process!