Posted by SLONotary on 4/10/05 1:30am
Msg #30795

Schedule SE - Self Employment Tax Calculation

I'm having a hard time understanding the form and the instructions. Someone please correct me if I am wrong. Lets say I have $2000 gross sales. Out of the gross sales I have expenses of $600, and there is a non-notary income of $850. On the Schedule SE on line 2 I put the net profit of $1400 then on line 3 I write on the dotted line "Exempt-Notary" $850 and put the differebce on line 3 of $550. Is this correct?

Reply by PAW_Fl on 4/10/05 7:23am
Msg #30800

Almost -

On line 3 you would enter your NOTARY FEEs that you charged (as allowed by your state law) in the parenthesis and subtract that from line 2, placing the difference on line 3 in the column.

The allowable exclusion is that part of your overall fees that could be attributed to your notarial fee. For example: If you were allowed to charge $10 for each acknowledgment or jurat completed, and there were 10 such notarizations, that would be an allowable deduction of $100 IF AND ONLY IF, the total charge for the signing was equal to or in excess of $100. That means, if you received $75 for the signing, you could only exclude $75 from the SE tax calculation on line 2. However, if you received $150 for the signing, then you exclude the entire $100 from the calculation.

Does that help? If you're still unsure, please consult a professional tax preparer or accountant for assistance.

Reply by SLONotary on 4/10/05 8:33am
Msg #30802

Helps, Thank you