Posted by MasterCloser on 9/15/06 5:50pm
Msg #146429

in my register..how do I break down the fees?

Call me silly for asking (it is Friday) but how do I break down the fees in my register?
What parts are taxable? All? Lets say I perform 4 notarizations [e-mail address] per=$20.00
I get $150 for the "job". What should I do to keep track?
Thanks to all my esteemed colleagues.
Eric J. Stenersen, NP,CNSA

Reply by Teresa/FL on 9/15/06 5:59pm
Msg #146431

Here's how I keep track:
$150 is gross taxable income
$20 is exempt from SE tax

When you do your taxes, you will show your gross income minus any deductions/exemptions and that is your net taxable income for Federal Income Tax purposes.

To calculate your SE (Self-Employment) Tax, you substract the total earned from notarizations from your net taxable income.

I use Turbo Tax and it walks you through it. I am not a tax professional, so you will probably want to speak to an accountant. Just make sure the accountant knows what portion of your income is derived from notary fees and can be excluded for SE tax computations.

Reply by Joan Bergstrom on 9/15/06 11:20pm
Msg #146461

One suggestion.
When you bring your tax information to your tax person; tell this person that Ack & Jurats are exempt from Federal Self Employment Taxes. Most people In the US understand Self Employment taxes as Social Security taxes but if your self employed (most notaries are self employed) you are now dealing with Federal Self Employment Taxes.

I don't think many tax preparers have any idea that the fees we are paid for Ack & Jurats are exempt because very few citizens are exempt from Self Employment Taxes (Social Security).

Military and Congress/Senators are just a few that I can think of that are exempt and I am sure there are a few others.

In Calif that means that every Ack or Jurat we do in a loan signing @ $10 per signature is exempt from Federal Self Employment Taxes.

For Calif notaries this is a big deal but for other states that charge .$50 or $1.00 or more per notarization this is probably not a big deal but should be something they might think to note with their tax person.

I am not a tax person so if I got my advise wrong, please post as this will help me and everyone else!

Reply by Debbietax_CA on 9/16/06 12:46am
Msg #146478

Good info, except that military is not exempt from Social Security and Medicare, they have to pay it like everyone else. They even have to pay it when they are in a "tax free" combat area.

Reply by sue_pa on 9/16/06 2:17am
Msg #146481

In your register you only record the notary fees - each document gets a separate line - in the case of husband and wife they each get a separate line for each document- only $2 for the additional signer. In your example, you will end up with 4 lines of $5 each - the additional $130 shows up no where. You need a separate record keeping system for your 'signing' business.

Reply by Gary_CA on 9/16/06 2:59pm
Msg #146537

Here's what I'd do...

In my journal I'd make no mention whatsoever of fees above and beyond the stuatory max fees. I noticed in the intro to the MoJo it mentioned putting travel fees in the comments, but that just seems like asking for trouble to me.

In my accounting (I use Quickbooks, but Quicken or MS Money would work the same) I'd make two seperate income accounts/categories... one for fees and the other for "Other Notary Income" or "Travel Fees"... that way, come tax time it'll be easy to seperate them.

Reply by ReneeK_MI on 9/17/06 6:11am
Msg #146583

I do as Gary outlined, using Quicken H/B

In my MoJo Journal I reference the invoice number, as a means of linking all records for each assignment.

In Quicken, I have set up these income categories: Notarizations, Mileage & Handling, and Consulting.

When I do an invoice in Quicken, I first input the category for a fee – “Notarizations”, and in the next field I put “X notarizations @ $10 each”, and then the total of that fee goes into the fee column. Then, I input the “Mileage …” category, and then input “X Miles r/t, e-doc, refi/1st” (as applicable). Then I do the math … if the number of notarizations would equal a fee GREATER than the total, then the total ACTUAL fee goes under “Notarizations” and the “Mileage/Handling” fee remains at zero. If the number of notarizations equals a fee LESS THAN the total actual fee, then the balance is what goes into the “Mileage/Handling” category.

I use the “Consulting” category for other services as it implies, but not for signings.

At the end of the year, I can then immediately pull up the total income from fees, broken into those categories. If I ever need to produce a record to substantiate the total income from notarial fees, each invoice is linked by reference to the MOJO, which would list each/every document I’ve notarized.

IF I have time – and I don’t always have the time – I will hand-write on the back of MY copy of the invoice (I keep a hard-copy in a file) a list of each notarized doc, flipping through the package and jotting them down. I only enter the total number/total fee in the Quicken record.

Quicken H/B has a separate record of the mileage – I enter the mileage info after the signing is completed (that way I never have to delete a record if the appt cancelled). I take my copy of the invoice with me to the closing, jot down any further notes I might want a record of. If it’s pertinent, I’ll add it into the Quicken invoice record (for example, if I’m instructed to make some correction to a doc, or there was some kind of problem, or ANYTHING I just want to make notes on).

I absolutely love Quicken – I’ve seen Quickbooks, but personally I thought it was over-kill for the kind of business records we really need, and I try to keep things as simple as possible. I spend a little time on each invoice – and in that way I have complete, concise records and accounting processes. I put EVERYTHING on the invoice – names, addresses, phone numbers, who contacted me, e-mail addresses, shipper account numbers, title file numbers, loan numbers, EVERYTHING. The MoJo I keep only the basic info needed, and of course the invoice number – which is the ‘bookmark’ of sorts to all the details. Since the MoJo goes out in the world with me, there’s a greater chance of it’s being lost, damaged or destroyed … and that’s why I keep THAT as basic as possible. (You can't beat the MOJO, either - it's absolutely the best journal I've ever seen!)