Commissions and taxes

[Greg Stetz]

I know that most of you are not qualified to give tax advice and I’m not seeking that exactly. I just wonder how much roughly %wise I should set aside to be taxed on. Im a licensed sales associate in Florida. 

[Ashish Acharya]

Originally posted by @Greg Stetz:

I know that most of you are not qualified to give tax advice and I’m not seeking that exactly. I just wonder how much roughly %wise I should set aside to be taxed on. Im a licensed sales associate in Florida. 

Do you know about estimated tax payments? 

You just don’t set aside for the taxes, you have to actually make a payment each quarter. 

Estimated Tax Payments:

Lesser of

1. 100% of the tax shown on the taxpayer's return for the preceding year or
2. 90% of his tax for the current year.

If 2018 AGI was over $150,000 ($75,000 for marrieds filing separate returns) must pay the lesser of

1. 110% of the tax shown on the 2018 return
2. 90% of their 2019 tax liability

Four times a year, 25% of the “required annual payment” for the current year. Note: The 25% requirement is applied separately to each installment. Thus, a taxpayer may be penalized for the underpayment of estimated taxes for any installment for which his estimated tax payments plus taxes withheld from salary (and certain other payments) don't total at least 25% of the required annual payment.