What is a commission sales associate?

What happens if i have to pay back an unearned sales commission the year after i was paid?

• what happens if i have to pay back sales commission (advanced on estimated future revenue of a signed contract) the year after i was paid because the sales didn't materialize? So, I paid tax on commission in previous year. But because revenue did not materialize, I have to pay back the commission in current year. Do I amend prior year tax return for overpayment of tax?

• Answer:

  Nope, you don't amend. You get IRS pub 525 and look at the chapter on repayments. If the amount is $3000 or less, you get a lousy schedule A deduction. If the amount is more than $3000, you get a credit for the excess taxes paid in the prior year (or a less lousy schedule A deduction).