Posted by Tax-Notary/CA on 7/30/04 2:26am
Msg #5217

Self Employment Tax

In a lot of messages I see people setting there fees of against an hourly payment you would get if you worked for an employer.
Do you realize that you have to pay more tax on your income (after expenses) than an employee would do?
Self Employment Tax is 15.3% and as an employee they only take 7.65% out of your pay for social security and medicare.
Ofcource, if you live long enough you will get social security money back, and probably medicare too, but still...............................

Reply by Carolanne_PA on 7/30/04 7:06am
Msg #5219

As an employee your earnings are subject to social security and medicare taxes. Your employer contributes half and you contribute the other half. As a self employed individual you contribute the entire amount. However, half of that amount is treated as an adjustment to income. This adjustment allows you to reduce your income by half of your self employment tax.

Reply by Sylvia_FL on 7/30/04 7:27am
Msg #5220

However, the notary fees themselves are not subject to SE tax.

So, if a notary were to do a $50 signing, with 5 notarizations in the State of Florida, the fee for notary services in Florida is $10 per notarization, so that $50 fee would be $50 of notarizarions, and the whole amount would not be subject to SE tax.

However if it was a$100 signing, then $50 would be subject to SE Tax (in the State of Florida)
The other $50 would be free of SE tax

Reply by Tax-Notary/CA on 7/30/04 9:47am
Msg #5229

That's true but I doubt if every notary knows that

Reply by Roger/OH on 7/30/04 10:19am
Msg #5233

SE Tax exemptions are a pretty regular topic on the notary boards (especially after the first of the year) so the information is readily available to the many notaries that use the boards.

Reply by redonthehead on 7/30/04 10:26am
Msg #5235

If the notary has taken ANY

Reply by redonthehead on 7/30/04 10:28am
Msg #5236

Sorry, finger slipped.

If the notary has taken ANY type of educational class for being, not only a notary, but a signing agent, this subject is dicussed thoroughly.

Reply by Sylvia_FL on 7/30/04 11:13am
Msg #5237

In Florida, notaries are required to take a 3 hour class. The ones I teach, I do let them know about the SE exemption. (Of course, most of them, it doesn't make a difference as they are usually becoming notaries as part of their employment, but at least they have been informed in case they need to know)