Posted by THE CRUZ'N NOTARY on 1/25/04 5:44pm
Msg #760

TAXES

I have heard you can take business tax deductions on a per notarized signature basis on your Federal Taxes. Any information regarding this would be appreciated not only by me but I am sure others as well.

Reply by Carolanne_PA on 1/26/04 8:54am
Msg #765

The fees for each notarization is excluded from self employment tax. However, it is not a tax deduction; meaning these fees are still subject to federal tax.

Reply by L in WA on 1/27/04 12:49am
Msg #775

"Per notarized signature" and "deductions" refers to two opportunities for you to save on your income tax.

"Deductions" refers to the many legitimate business expenses we incur as mobile notaries. 37.5c per mile for use of our car, supplies, computer purchase, toner, insurance, dues, car purchase depreciation, etc.

"Per notarized signature" refers to your self employment tax, just as the last poster mentioned. Almost everyone but notaries has to pay around 15% in self-employment taxes on net business income. But we notaries are exempt from paying SE taxes on the notary fee portion of our income: the amount each state lets us charge per signature or seal.

Example: Say you had a gross income as an NSA last year of $20,000. But you dug long and deep and found $12,000 in business expenses. So you have a net income of $8,000 on your schedule C.

Of this, your journal tells you the notary-fee-only portion was $1,500. On schedule SE, you can deduct $1,500 from the amount of net income to be taxed. See more specific information at www.irs.gov Look for information on "Schedule SE."

If anyone has figured out how to jerry-rig Turbo Tax into listing this exemption amount onto the SE and spreading that resulting tax deduction onto the 1040, I'd love to hear it. I fear I must do my tax forms by hand otherwise.

Reply by Dennis D Broadbooks on 1/27/04 5:08am
Msg #777

TurboTax

I've never had a problem with TurboTax calculating the Notary SE tax deduction & then transferring it over to the 1040. I don't have my 2003 version loaded yet so I can't give you specific directions how to access that deduction, but it's there.

Reply by Esther, Ca on 1/28/04 1:45am
Msg #795

Re: TurboTax

This is my first year as a notary, I plan on using Turbo Tax. Do I need to buy the Premier version? The box says for home business.

Reply by Dennis D Broadbooks on 1/28/04 4:51am
Msg #798

Which Version of TurboTax...

...depends on if you want to integrate with a version of Quicken or Quickbooks. I utilize Quicken's Premier Home & Business for my financial organization purposes & thus I need to purchase TurboTax's Premier Home & Business 2003 in order to be able to seamlessly transfer all the information from one program to the other. I'd suggest going to a local store like Sam's, Office Depot, Best Buy, etc, etc. That way you can look at the box to see what versions are offered & what programs they're compatible with. You can also go online @ http://intuit.com to review what they have to offer. If you currently don't have ANY Intuit products to worry about interfacing with, then your choice depends on whether you want to do strictly your business taxes or combine it with your personal. Hope this helps!

Reply by Stephanie on 2/3/04 2:36pm
Msg #856

What Principal Business Activity Code do you use?

Reply by Monique on 2/14/04 5:27pm
Msg #935

I was wondering that myself. I am filing as a Notary for the first time this year.

Reply by Monique on 2/17/04 2:51pm
Msg #949

OK, first let me say I use a tax software to file taxes.

I contacted the NNA and the IRS today to find out what would our Principal Business Activity Code is. The NNA doesn't keep that information as it generally is too varied. The person at the IRS that I spoke with has no idea. She kept telling me as a Notary, I don't pay self-employment taxes. Of course I know this. After explaining thoroughly what exactly a Notary Signing Agent is, she didn't have an answer. She checked the master tax guide and couldn't tell me, as they don't have a classification for what we do. They are going to research it and contact me in 15 days with an answer. Now I have a question: if the IRS doesn't know how to classify us, then how is a tax preparer going to help? I don't know about the rest of you, but the main tax preparers in my neighborhood is H&R Block and Jackson Hewitt. I doubt they know either. So what do we do?

Reply by Holly on 2/17/04 5:22pm
Msg #952

I used code 531390 which is for other activities related to real estate. It was the only code I could find that seemed to fit besides the misc code.

Reply by Stephanie on 2/17/04 8:24pm
Msg #954

Thank you Holly

Reply by Monique on 2/17/04 10:37pm
Msg #958

Thank you Holly. I was thinking about using that one or the misc code. Hopefully this will get easier next year. :)