Adjusting your Deductions for Tax Reporting

Adjusting your Deductions for Tax Reporting

Determining How you will Report

Whether you're reporting Gross, Full or Partial NET Commissions, you will have to adjust each deduction accordingly to how you will be reporting. 

Here's the definitions for all three ways to report:
Gross Commissions - Total Commissions earned less sales tax and not considering any deductions.
Full NET Commissions - Total Commissions earned less sales tax and less ALL deductions.
Partial NET Commissions - Total Commissions earned less sales tax and less SOME deductions.
*Please note for the purpose of tax reporting, NET Commissions mean Gross Commission (not including sales taxes) less Deductions (not including sales taxes).  If Sales Tax Applies, it's not considered in year end tax reporting.  Your agent will have to report Sales Tax separately.

Previewing your Deduction's reporting Settings

Head to your Brokerage Menu>Deduction Templates

Here you can visually see which deduction is set to Reduce your Agent's Commissions on Tax Reporting as they are displaying the "Reduce Taxable Income" badge under the deduction name.
Make sure you tab through all your deduction pages if you have more than 10 deductions set up.

Adjusting/add Reduced Taxable income on a Deduction

Click on the Deduction Name to view the deduction set up, click the pencil on the far right of the Deduction to edit it.

Reporting NET Commissions

To set your Deduction to Reduce your Agent's taxable Income, click on the pencil next to Deduction Name to edit the deduction and check the 'Reduce 1099/T4A by this Fee' checkbox and save your change.

Reporting Gross Commissions

Congrats! You don't have to adjust anything if all your Deductions lack the Reduced Taxable Income badge.  If they do, click the Deduction to edit and deselect the 'Reduce 1099/T4A by this Fee' checkbox and save your change.

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