How do taxes work on commission, is if a gift tax? State and fed (Arizona). Do you have to pay them at the end of the year or do they get taken out of your commission check?

I pay my state & Fed at the end of the yr., such a fun time.

Commissions are taxed just like any other income you make (in Oklahoma). No, they are not taken out of your commission check -- we are independent contractors and, as such, responsible for paying quarterly taxes. If you wait till the end of the year, you may have to pay penalties and interest -- if you haven't paid tax on at least 80% of your income.

Recommend you consult a CPA or tax accountant (which I am not one).

What % of you income would you say you pay in taxes, 20%, 50%?

Depends on your income bracket as to how much in taxes you will pay. Generally, put aside 10% out of every check and pay your taxes quarterly to the IRS and your state (if applicable). You can get set up on quarterly tax payments with the IRS and even pay them online. You may still owe more at the end of the year, but it won't be as big of a shock. It will also depend on your expenditures and deductions that are business related also. Find yourself a good CPA that specializes in working with real estate agents.

Even if we were tax experts, which most of us are not, you have provided no where near enough information to answer your question.

A couple of examples:

1) You get to deduct certain expenses (which vary widely) from the gross commission income before arriving at a taxable income.

2) Your commission income may be only one of many income streams that will be included in determining your taxable income.

I have to pay estimated payments to Uncle Sam every quarter based on last years income. You should be considered self employed so that makes paying taxes all the harder and harder to swallow. I suggest you save 30% of every commission check to be safe. And hold onto all real estate related reciepts and keep track of your miles you use your car for real estate related activities. But as I understand it you can only count your mileage from your office to whereever you need to go real estate related and back to the office. Doesn't make much sense I know, but that's what I understand. My office is at my house so it's all the easier to count mileage.

Taxes aren't based on commission.Taxes are based on being self-employed, and if you are a sole proprietor,partnership,llc,or other type of corporation.

Your entity determines your tax structure and strategy.

Talk with a CPA or tax attorney to learn what option you beleive is best for you.If you don't have alot of money llc's cost a few hundred to start and offer many tax benfits for the small business owner.