question.jpgIn Federal Income Tax

I’m a salesman. Are my commissions taxed?

Yes. Commissions are taxed on the year in which they are credited to your account, whether you draw on them or not. However, if you’ve earned a commission, are not credited the commission until the following year, you are taxed on it the following year. Furthermore, if you receive an advance on the commission, you must pay taxes on the advance in the year in which you received it.