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Author: skeeter115 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121572  
Subject: base salary vs commissions Date: 9/26/2001 2:33 PM
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Do i want a higher base salary and less payout in commissions or lower base pay and higher commission payouts, since i always thought the tax rate on commisions is higher than payroll taxes? where can I get more information on this question?
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Author: ptheland Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 54243 of 121572
Subject: Re: base salary vs commissions Date: 9/26/2001 2:55 PM
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Do i want a higher base salary and less payout in commissions or lower base pay and higher commission payouts, since i always thought the tax rate on commisions is higher than payroll taxes? where can I get more information on this question?

Take whatever will get you more income. Commissions and base pay are taxed at the same rate.

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Author: joebedford Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 54244 of 121572
Subject: Re: base salary vs commissions Date: 9/26/2001 4:00 PM
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And as a former commission-based salesperson, TAKE THE HIGHER BASE SALARY! I busted my @ss for years trying to "make it big" on commissions, and instead almost brought myself to financial ruin. There are too many factors that are out of your control that affect your pay.

Hourly and loving it...
Joe

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Author: edcosoft Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 54249 of 121572
Subject: Re: base salary vs commissions Date: 9/26/2001 7:35 PM
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Do i want a higher base salary and less payout in commissions or lower
base pay and higher commission payouts, since i always thought the tax
rate on commisions is higher than payroll taxes? where can I get more
information on this question?


The tax rate is the same except that if the commission are paid you on a 1099 instead of a W-2 you'll have to pay SE tax on the difference between your salary and the SS limit, plus MED on the remainder all at twice the rate it is deducted from salary. You can then deduct that extra 1/2 as a SE deduction, but a deduction from income is only worth 28% (or your tax bracket) what a tax costs. However, you can take expenses as a deduction from 1099 commissions on Schedule C instead of Schedule A as employee expenses.

You can figure it out on a 1040 and Schedule A,C and SE. ed

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Author: ptheland Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 54250 of 121572
Subject: Re: base salary vs commissions Date: 9/26/2001 7:39 PM
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If were talking about salary and commission coming from the same employer, it's almost certain that the commissions are going to be on a W-2, not a 1099. So the SE tax is not an issue, and expenses are on 2016/Schedule A.

--Peter

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