Commission only W2

I am considered a W2 employee but I am commission only. No Salary. No reimbursement. Am I allowed to deduct my expenses? What if my ex itemized when we filed married filing separately?

Deductions & credits

A W-2 employee cannot deduct any business expenses on the tax return (from 2018 thru 2025)  and if you file separately you  and the other spouse must both use the standard deduction or both use the itemized deduction ... so if one party itemizes the other must also itemize even if they have nothing to itemize. 

Deductions & credits

if you are not married on the last day of the tax year your only options are filing single or head of household. in neither case does it matter what the ex did regarding itemized or standard deduction 

Deductions & credits

we divorced march the following year so we were still married(separated) during that tax year.

Deductions & credits


@WallysWorld wrote:

we divorced march the following year so we were still married(separated) during that tax year.


If your Ex filed MFS while you were married but separated and itemized their deductions, that forces you also itemize your deductions if you file MFS, even if you don't have any deductions to include.  (But, you do not have to itemize if you or your ex filed as head of household.)

 

You should have at least some deductions to include, like payment or withholding of state income taxes, maybe a mortgage, maybe gifts to charity.  However, work related expenses are not an allowable deduction. The program still allows you to enter them because you may be able to deduct them in some states, so there's no harm in listing them.  You just won't get a benefit on your federal return. 

Deductions & credits

Not so sure about that.  My notes say...

The person filing HOH does NOT have to itemize unless they want to, but the person filling MFS MUST itemize if the HOH spouse does.

 

The rule for MFS says you MUST itemize if your spouse itemizes.

 

The rule for HOH says you do not have itemize if your spouse does.

Carl
Level 15

Deductions & credits

I am considered a W2 employee but I am commission only. 

Not sure, but I think it matters if the "statutory employee" box is checked on the W-2. Can someone more in the know than me, comment on that? Can one claim expenses on the SCH C if that box is checked?

 

Deductions & credits

It's been a while. I may have misremembered the degree to which HOH uncouples the spouses. 

TomD8
Level 15

Deductions & credits

@Carl wrote:  

"Not sure, but I think it matters if the "statutory employee" box is checked on the W-2. Can someone more in the know than me, comment on that? Can one claim expenses on the SCH C if that box is checked?"

 

The answer is Yes.  If the "Statutory Employee" box is checked in the W2, the taxpayer reports their wages and expenses on Schedule C.

https://www.irs.gov/pub/irs-pdf/i1040sc.pdf

 

**Answers are correct to the best of my ability but do not constitute tax or legal advice.