Commission Compensation

We have a client that works for a radio station that makes a very small base salary with large commission checks each month. She is having way too much withheld from the commission checks on good months. This is leading to her considerably overpaying taxes each year and getting a large refund. Is there a way to remedy this? Would setting up a draw with the employer solve the withholding situation?



File a new W-4 and claim more allowances.

The commission check is separate from the salary check and withholding is an automatic 25%. Is it possible to check “exempt” on the commision w-4 and then file quarterly estimated payments?

Look closely at the wording of line 7 for Form W-4 and you will see that you are not “Exempt”.  Also look closely at the line under which your signature appears and ask yourself if you want to face penalty for perjury.  Tom D.

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