Posted by pat/WA on 1/21/11 10:18am
Msg #369519

number of documents and number of notarizations

Does everyone keep a record of the number of documents and the number of notarizations in each signing? I have not been doing this and apparently there is a tax advantage.

Reply by kathy/ca on 1/21/11 10:20am
Msg #369520

Always, in my journal! n/m

Reply by pat/WA on 1/21/11 10:25am
Msg #369521

Re: Always, in my journal!

What is the advantage?

Reply by OR on 1/21/11 10:30am
Msg #369522

Re: Always, in my journal! dotto n/m

Reply by OR on 1/21/11 10:31am
Msg #369523

Re: Sorry ditto n/m

Reply by HARRY_PA on 1/21/11 10:36am
Msg #369525

Fees earned as a notary are taxable as income, but not for self employment tax. Breaking out the fees for each notarization gives you the correct amount you may claim as exempt from self employment tax.

Harry

Reply by Linda_H/FL on 1/21/11 11:18am
Msg #369529

Msg #367661 n/m

Reply by Julie/MI on 1/21/11 11:22am
Msg #369531

When I first began as a contract closer (10 year anniversary today) my state only allowed $2 per notarization, so I didn't bother. We got a "raise" up to $10 per notarization in 2003 and now I simply use old-fashioned tally marks.

Reply by pat/WA on 1/21/11 1:03pm
Msg #369547

Re: number of documents

What is the advantage of keeping a record of the number of documents? I understand why you keep an account of the number of notarizations.

Reply by kathy/ca on 1/21/11 1:09pm
Msg #369548

Just a record of the notarized ducuments, no others. n/m

Reply by Larry/IL on 1/21/11 1:11pm
Msg #369550

Re: number of documents

Your income from each notarization is taxable as income. You will not have to pay FICA taxes on income derived from notarizations.

Reply by Frenchie/TN on 1/21/11 1:11pm
Msg #369551

Re: number of documents

The amount charged per seal (amount allowed by your State) is not subject to self employment tax. If you keep track of how many notarization you do, you can deduct that sum from your net income for self employment tax purposes. This is actually your contribution to Social Security tax. Personally I do not deduct that from my net income as I figure the more I pay into Social Security the larger my benefits when I retire but that being said everyone's situation is different and unique.

Reply by taxpro on 1/21/11 1:32pm
Msg #369555

Frenchie, you didn't ask for advice, but...

Do yourself a favor and deduct the notary fees when figuring your self employment tax. Take the money you saved and put it in a Roth IRA. Yes, your benefits may be somewhat higher if you pay more SE tax, but not high enough to make up for the extra you paid.

Reply by Linda_H/FL on 1/21/11 1:45pm
Msg #369561

Re: Frenchie, you didn't ask for advice, but...

But there's other things to consider...such as eligibility for medicare benefits and disability benefits - the "quarters". If she has no other employment where she's making the contribution, and depending on her age, she may be slitting her own throat by not paying that tax.

MHO

Reply by taxpro on 1/21/11 1:52pm
Msg #369564

Re: Frenchie, you didn't ask for advice, but...

True. I was assuming she would still meet her 4 quarters' worth with other loan signing income. Perhaps that's not the case.

Reply by Frenchie/TN on 1/21/11 2:57pm
Msg #369575

Re: Frenchie, you didn't ask for advice, but...

Taxpro,
That is why I said each situation is different and unique. Everyone has to think this through and decide what is best for THEM! Thanks anyway for your comment even though I am very aware of all the implications you mentioned. I am certain it will get someone else on this board to think about it. Although a lot of people are skeptical about Social Security, there are many, many people who would plan to put that savings in their IRA and then they don't do it. So you have the bird in the hand vs the bird in the bush situation.

Reply by pat/WA on 1/21/11 3:22pm
Msg #369582

IRA

We put money in our IRA accounts for years. When we reached 62 those accounts were worth 1/2 what we had put in them.

Reply by CopperheadVA on 1/21/11 1:16pm
Msg #369553

Re: number of documents

I don't keep a record of how many docs are in each package.

I do keep a record of the notarized docs in my journal - I write the name of each doc on the journal entry for the signer and also I total the monetary amount for those notarizations on that same journal entry. I keep a running tally of the value of the notarizations as an entry on my accounts receivable spreadsheet - $5 per each notarial act here in VA.