Posted by Art_MD on 6/30/04 8:53am
Msg #3704

non taxable notary fees

I've talked to a number of notaries and many do not realize that notary fees are (in my reading of the tax code) not taxable. so...
one signing senerio:

30 miles to signing, 8 noterizations, fee of $90.

19.50 for travel as a business expense.
if the state allows $5.00 max per notary act, $40 is exempt from federal taxes.
Disregarding other expenses (cell phone, internet access, equipment etc) the total that should be taxable would be $31.50

Reply by Art_MD on 6/30/04 8:53am
Msg #3705

oops - should be $30.50 taxable

Reply by Sylvia_FL on 6/30/04 8:59am
Msg #3706

Art
Notary fees are taxable as income. They are exempt from SE tax, but you still have to pay regular income tax on them.

Reply by HisHughness on 6/30/04 9:52am
Msg #3708

Sylvia, now I understand what motivated the poet when he declaimed, "Who is Sylvia, what is she, that all the swains adore her?"

Can you give me some sort of citation of authority that notary fees are non-taxable as SE income? I don't see the underlying rationale, and I'd feel a lot more comfortable with some backup (IRS loves to audit doctors and lawyers). Many thanks.

Advice like this sure does make this board valuable.

Reply by Sylvia_FL on 6/30/04 10:22am
Msg #3710

Your Hughness:)

Misquoting Shakespeare is a serious offense ! <j/k>

It is:

Who is Sylvia?
What is she?
That all our swains commend her?
Holy, fair,
And wise is she
The Heav'ns such grace did lend her
That adored she might be.


Check this out

http://www.irs.gov/pub/irs-pdf/i1040sse.pdf

do a search on "Notary" and it will bring up the relevant section.

Also it is documented in the IRS publication 533 on page 6 (I think it is page 6) - it states

Notary Public

Fees you receive for services you perform as a notary public are not subject to SE tax.

Reply by Shelly_FL on 6/30/04 11:05am
Msg #3714

Thanks, Sylvia, for the information. In some respects, I was glad to see I won't need to mess with the Schedule SE if my net earnings are less than $400 for 2004. Although, being new to this business, it would be nicer if I wish I could say I have exceeded that mark.

Reply by HisHughness on 6/30/04 11:21am
Msg #3715

Would you honestly expect a lawyer to quote anything correctly, except his fee schedule?

Reply by Sylvia_FL on 6/30/04 11:31am
Msg #3717

Hugh!
How can you use the words lawyer" and "honestly" in the same sentence??? LOL

Reply by HisHughness on 6/30/04 11:33am
Msg #3719

I failed to thank you for the confirmation about the non-taxability of notary fees. I'll save a bundle next tax season. That's worth a fancy dinner when you're in Austin, though my wife, stick in the mud that she is, would probably insist on tagging along.

Reply by Sylvia_FL on 6/30/04 11:43am
Msg #3721

That's OK - my husband would insist on tagging along too:)

I have never been to Austin, been to Houston - and was ill for weeks after! Never again!

Reply by Jon on 7/2/04 12:15am
Msg #3846

Hugh, you may want to consider amending your returns for the last three years if you have been a NSA. I first found out about this exemption in '97 and when I re-did my taxes my tax liability went from $11,000 to $5,000, makes doing the 1040X worth if you can save $6,000.