The company I worked for sold its domain name for a considerable amount of money. I co-brokered the sale of the domain and received a 6 figure commission payment in November of 2019.
I assume I have to file a 1040-es since no taxes were taken from this commission. The problem I have is everything I have looked at in TurboTax (and in speaking with a CPA via TurboTax Online) say that their service can't help calculate my 1040-es, and they sent me to the IRA page to get the form.
I am at a loss at how to calculate and file this. It appears that one option is to just wait until I do my 2019 taxes, declare it then, and pay the late fee penalty. (4% x tax estimate x 30/365)
However I do it, how and where is the commission declared in TT online?
You'll need to sign in or create an account to connect with an expert.
If you report it on Schedule C as self employment income you will pay about 15.3% SE tax on it in addition to any regular income tax on your total income. So you can send in like 20% to the IRS and some to your state.
Here are the Federal 1040ES instructions and blank forms
http://www.irs.gov/pub/irs-pdf/f1040es.pdf
Or pay them directly on the IRS website. Be sure to pick 1040ES payment for 2019
https://www.irs.gov/payments/direct-pay
However I do it, how and where is the commission declared in TT online?
Depends on how the issuer reports the distribution ... ask them how it will be reported.
Since you are asking from TT Live, for which you paid extra, Please contact a rep for personal guidance once you have the answer to the question above...
https://ttlc.intuit.com/questions/4124827-how-do-i-connect-with-a-tax-expert-in-turbotax-live
I did ask the TT Live CPA how to calculate my 1040-ES taxes, and they could not find an answer and sent me off to the IRS web site to get the form.
Do I need to try again, and see if I get someone else that can help me calculate the amount?
As for how it is being reported: It isn't. Everything I was told by escrow.com is that they do not report brokerage fees.
Ok ... so you earned a commission ... report it on the Sch C for self employment income. In the 2019 program enter all your income and expenses then look at the balance due on the Refund-O-Meter ... send that amount with the 4th quarter estimated payment due 1/15.
If you report it on Schedule C as self employment income you will pay about 15.3% SE tax on it in addition to any regular income tax on your total income. So you can send in like 20% to the IRS and some to your state.
Here are the Federal 1040ES instructions and blank forms
http://www.irs.gov/pub/irs-pdf/f1040es.pdf
Or pay them directly on the IRS website. Be sure to pick 1040ES payment for 2019
https://www.irs.gov/payments/direct-pay
Appreciate you answer Critter, however I did mark the other as best answer because I needed to calculate the estimated taxes prior to getting my W-2 in time to meet the Jan 15th deadline for filing 4th quarter estimated taxes.
Thank you both.
Well here is the gist ... you had a 6 figure commission and on that you will not only pay the 15.3% SE taxes but also 24% federal taxes = 39.3% ... so if you take the 20% route you may underpay. Use the last pay stub for estimated purposes. Using the current program to estimate the balance due is a better option but it is your wallet.
If you got a 6-figure commission on one transaction in the 4th Q 2019, you need to quit wasting your time trying to "figure" anything. You are in "at least" the 22% tax bracket. Add to that the 15.3% SE tax you have to pay, and you're paying over 30% on just that one transaction. Send the IRS 30% of that commission "RIGHT NOW" at www.irs.gov/payments, and be done with it.
Then when you complete your tax return you'll be able to enter each of your quarterly tax payments in the "Estimates and Other Taxes Paid" section under the Deductions & Credits tab. This way, you're practically "guaranteed" to get some of that estimated payment refunded to you. Otherwise, if you underpay by to much, you will be assessed an underpayment penalty. With a 6-figure income, that penalty won't be a small amount either.
Still have questions?
Make a postAsk questions and learn more about your taxes and finances.
Tax_payer03
Level 1
riogrande
New Member
mehrabm
New Member
DougB5
New Member
msauer26
New Member
Did the information on this page answer your question?
You have clicked a link to a site outside of the TurboTax Community. By clicking "Continue", you will leave the Community and be taken to that site instead.