Posted by YRent on 8/18/05 10:14pm
Msg #60079

Self-Employment Tax/Tax Writeoffs

I do this as my career, a mobile notary (just opened my own company, formally worked for a title company as a closer)...........I just found out that notaries are not subject to self-employment tax, but because of this cannot writeoff any expenses......help?????? Anyone else ran into this? I even stumped my CPA, they looked this up and found that it is true. My office is in my home and of course I have expenses that I could use as writeoffs, does anyone have any comments on this?

Reply by Bonnie/FL on 8/18/05 10:20pm
Msg #60081

I too would like an answer to this question. Also, on my income tax return, what am I called? Notary, Mobile NOtary, Singer, Mobile Signer. I have always been a Paralegal working for a regular company with a normal title to use on my tax form, and was a REaltor, so of course, used that as my title, but don't know what I am called now for when I file my income tax return. ANy suggestions as well a the answer to the self employment write off expenses. Couldn't we still use the write offs against the signing part of hte business that we are paid for what we are actually claming on the SE Tax and since we are not claiming the money we are paid for our actual notorizations? Thanks.

Reply by TitleGalCA on 8/18/05 10:36pm
Msg #60088

I haven't yet filed a tax return as a SA (I started this year) but my understanding is the actual notary fees per document (eg. $10 for one acknowledgement) is deducted from the total signing fee; the SE tax is computed on anything remaining after all the notary certificates. This is why I like MOJO, it has boxes to check for each document in a package, it's handy at tax time.

There's been posts on the forum on SE tax and other tax matters; use the search feature.

Reply by TitleGalCA on 8/18/05 10:37pm
Msg #60089

Re: correction, make that notary fees per SIGNING....n/m

Reply by YRent on 8/18/05 10:44pm
Msg #60093

Sorry about reposting the same subject but when I went to search I used all the words involved and came up with nothing.

Reply by YRent on 8/18/05 10:45pm
Msg #60094

In Kansas, we have no cap on cost per notary acknowledgement, etc. We have no set fees here so there is nothing to use as a base for fees on the notary part.

Reply by MelissaM/FL on 8/18/05 10:51pm
Msg #60103

I did file my SA income last year on my personal taxes. I used Turbo Tax and it has a section to enter notary income. I keep a running tab of my notarizations and entered that number (notarizations times $10) under notary income. Then, I used my business expenses to cover most of my other income. Since last year was year 1 for my business, I had a lot of expenses, including fees for memberships and tests, purchase of printerS (had to find one that was PCL compatible and had dual trays), and other office expenses.

I'm not sure how all this will work this year because we incorporated in January, 2005, but we still track notarizations for both notaries who work in (and own) my company.

Reply by PAW_Fl on 8/18/05 10:59pm
Msg #60109

One slight flaw in your approach, Melissa. You said, "I keep a running tab of my notarizations and entered that number (notarizations times $10) under notary income." Unfortunately that may result in an invalid and overinflated statement of notary income. You can deduct your seals (times $10) used in each signing, but only up to the total amount received as income. That is, if you had 10 seals in a signing, but only received $75, you cannot exempt $100 as notary fees. Only $75 would count toward the notary fee exemption.

Reply by MelissaM/FL on 8/19/05 7:21am
Msg #60160

Paul, Thank you for clarifying that. I do not count 8 notarizations as income if the fee is only $75, but my invoices are broken down into # of stamps, mileage and/or other expenses. If my fee is less than the total notarizations x $10, I don't record that as a negative income.

Reply by YRent on 8/18/05 11:03pm
Msg #60111

When you say you used $10, is that something u just picked as a #, or do you have an amount req'd by state?

Reply by YRent on 8/18/05 11:15pm
Msg #60114

Melissa

I didn't change the subject so you would know I was asking a question, sorry! Can you tell me how you got the $10 amount? Is that a fee for your state or you just picked that #?

Reply by PAW_Fl on 8/19/05 6:21am
Msg #60152

Re: I'm not Melissa, but ...

The $10 per seal/act is the authorized amount a notary can charge in FL, per statute. It's not something that's simply chosen at random. When figuring your exemption, you can use the maximum 'allowable' fee.

Reply by YRent on 8/18/05 10:48pm
Msg #60099

As far as on the tax return.........I think I might have made a mistake when getting my tax id # for the company, I put mobile notary and should have put signing agency. Not for sure, my cpa and I are researching this further to find out what can be done if anything.

Reply by Art_MD on 8/19/05 7:08am
Msg #60156

I don't think the IRS cares that you do several income activities under your EIN. I am a consulting engineer but do closings as a side and between projects. Two totally different income streams, one EIN.

Art

Reply by Anonymous on 8/19/05 7:46am
Msg #60162

Does anyone have any knowledge of this in Ohio. Our fees are a lot less than $10.

Reply by Art_MD on 8/19/05 7:56am
Msg #60169

You can exempt up to the limit your state has imposed. MD is $2.00. CA is $10.00 Fed tax law says income from notary work. States effectively set their fees, thus setting different exemptable amount in different states.

Art

Reply by Iris_WA on 8/19/05 9:52am
Msg #60204

Unaware of any ruling that prohibits writing off of ...

expenses. But I concur with everyone else on the SE tax on the actual fees for notarizations.

If you could get back with a citation to the IRS law saying write-offs for expenses are not permitted, I'd be appreciative.

If what you say your CPA says is true (that expenses can't be written off), then what benefit is there to being in business for one's self?

Reply by Roger/OH on 8/19/05 10:09am
Msg #60215

Re: Unaware of any ruling that prohibits writing off of ...

I've always filed my business as a sole proprietor on Schedule C and write off normal business-related expenses such as mileage, office supplies, advertising, etc, as many here have done for years. As long as you complete the Schedule C form properly, there's nothing in the instructions that prohibit normal business expenses.

Reply by Bonnie/FL on 8/19/05 11:17am
Msg #60233

Re: Unaware of any ruling that prohibits writing off of ...

My CPA told me not to worry and he will figure it out just for me to keep good records, which I am doing and it is easy since I have the logs to complete for each signing. I also keep track of all my expenses (like my ink, paper, equipment). And I will provide him wiht all my mileage as he requested. I cannot claim the mileage if I am putting that in with my fee. I don't claim mileage, therefore I can claim in on my tax form. I just wanted to know what the heck am I called so for now I will tell him I am a mobile notary as my title unless anyone can think of something else. Just like someone would be a painter, realtor, seamstress, etc. I love this site, it is so full of great info and thanks to all.