fees deducted from commission income

andidc · ‎February 02, 2023

I am a sole proprietor that receives a commission via a 1099. I have some business expenses that are deducted from my commission check after taxes but before it is deposited into my bank account. How do I account for the income (the bank deposit amount does not match the 1099 amount - off by the amount of the expense) and add the business expense so that it is can be tracked as a deductible business expense. It is basically a pass-though expense, but since it neither gets deposited or expensed through an actual bank account, I'm not sure how to enter and track this. thanks,

andidc · ‎February 03, 2023

Actually I found an even better resolution when deep diving into the Community Q&A. I went to the original deposit transaction that was pulled from my bank statement. I edited similarly to how you would if you were spitting a transaction expense. I adjusted the deposit amount to the total paycheck amount (what's reported on my 1099). I added a second and third line in the negative (to indicate an expense) and labeled those 2 deductions as business expense under the appropriate category. The deposit total then matched the amount of the physical total of the deposit and the expenses showed up appropriately on my profit & loss chart use by my accountant to appropriately use for my business deductions.

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Rustler · ‎February 03, 2023

Create the items you need for the fees/expenses and link them to an expense account
Enter a sales receipt
list the total commission income received
list each fee/expense item, set the qty to negative one, and enter the amount
then deposit the balance to the bank account
download transactions and match

As a note though, commissions received are only reported on a 1099 at year end, commissions received should be posted as income when received.

andidc · ‎February 03, 2023

Actually I found an even better resolution when deep diving into the Community Q&A. I went to the original deposit transaction that was pulled from my bank statement. I edited similarly to how you would if you were spitting a transaction expense. I adjusted the deposit amount to the total paycheck amount (what's reported on my 1099). I added a second and third line in the negative (to indicate an expense) and labeled those 2 deductions as business expense under the appropriate category. The deposit total then matched the amount of the physical total of the deposit and the expenses showed up appropriately on my profit & loss chart use by my accountant to appropriately use for my business deductions.

karen712 · ‎January 05, 2024

I have the same issue for a client with her commission they deduct fees etc from her pay. How did you enter these a deposit and then expense?

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fees deducted from commission income