Car Sales Employees: Commission and Car Financing
Car salesmen typically earn a commission on each car they sell. The average commission is around 10% of the sale price. As a 1099 employee, leasing or buying a car depends on your circumstances. Leasing may be beneficial if you want flexibility. Buying may be better if you want to build equity. When applying for a car loan as a 1099 employee, you will likely need to provide additional documentation such as tax returns, bank statements, and proof of business contracts.
1099 Forms and Income Verification for Car Loans
Businesses must issue a 1099 form for every non-incorporated contractor paid over $600. They must also issue 1099s for attorneys. If employees are reimbursed for expenses without receipts over $600, a 1099 must be issued. These forms report income other than wages and salaries. The IRS gets a copy of 1099 forms. You must contact the IRS immediately if you haven’t received an expected form.
Proof of Income and Buying a Car
You can use 1099s as proof of income for a car loan. Lenders prefer W-2 income but may accept 1099 or unearned income. You can buy a car while self-employed if you meet income requirements and provide tax returns instead of paystubs. For proof of income, take copies of recent paystubs showing year-to-date pay. You may also use six months of bank statements.
Independent Sales Representatives
Independent sales representatives, also known as 1099 sales reps, sell products on behalf of a company away from the company’s premises. Sales reps can be independent contractors.