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Lev, Tax Advisor
Category: Tax
Satisfied Customers: 28081
Experience:  Taxes, Immigration, Labor Relations
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i have a client who has works for a company that works with

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i have a client who has works for a company that works with farmers. this client receives a w-2 from the company each year. he also receives commission type income from farmers if their wheat makes over a certain amount of bushels per acre. on his tax return, we have deemed this other income. he receives no 1099s from farmers, etc. the irs has contacted him to say self-employment should be paid on this . commissions are not subject to self-employment are they. wht is the answer.
Submitted: 7 years ago.
Category: Tax
Expert:  Lev replied 7 years ago.

The IRS agent is correct - commissions are considered a compensation for service provided and therefore are subject of self-employment tax.

Reporting commissions income as Other income without paying SE tax is incorrect.
Other income may include Miscellaneous Income that is not a compensation for the service.


The client need to file schedule C or EZ and may deduct qualified expenses.

Let me know if you need any help.


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