Posted by RIYA - Oregon on 2/15/05 11:31pm
Msg #20730

Payments to Signing Agents - Tax deduction for Notaries

Hello

I want to know how the Signing Agents are paid. Are they paid on 1099 Form
and
Is the income earned from Notary Services deducted from Self Employment Tax
In simple words, can a person save social security tax by working as a NOTARY

Reply by CaliNotary on 2/16/05 1:49am
Msg #20737

yes and yes

Reply by Art_md on 2/16/05 7:16am
Msg #20748

Income earned from notary acts are not subject to SE. The income above that for notary acts is subject to SE. Do a search and you will find several threads re: SE taxes. Quick example

signing fee $75
# or notary acts 5
Max fee/notary act (varies from .50 to $10 depending on state) say $5.00
$25 is not subject to SE tax.. But the entire $75 is reported as income for federal tax purposes.

Art

Reply by Alabama on 2/16/05 8:48am
Msg #20754

Where would I find the Max fee for the State of Alabama for the deduction calculation per notary act?

Reply by Art_MD on 2/16/05 9:44am
Msg #20761

If no one from AL replies, yougo to your notary handbook. It is in there.

Art

Reply by Alabama on 2/16/05 11:12am
Msg #20776

Re: Thank you...This is what I found out.....

What notary handbook are you referring to? I have handbooks from different associations.
I called one of the associations and I believe I have my answer. .50 per notary act per person. Example given: Loan docs. 5 notarized pages. 2 people. $5.00 excluded for SE tax for that package. It is my understanding Alabama is on the bottom for these fees. I guess you take what you can get as far as a deduction, it's better than nothing.

Reply by CaliNotary on 2/16/05 11:32am
Msg #20781

Notary Handbook

Whenever somebody refers you to your handbook in this group, they're talking about the notary handbook from the Secretary of State.

Reply by Art_MD on 2/16/05 11:39am
Msg #20787

Re: Thank you...This is what I found out.....

You have the numbers wrong - if 2 people sign one form, its still 1 notary act.

Art

Reply by jojo_MN on 2/16/05 3:03pm
Msg #20849

Re: Thank you...This is what I found out.....

According to the Notary Signing Agent Certification Course published by the National Notary Association,( the example on page 360), if there are four documents requiring notarization for two borrowers, the agent notarized 8 signatures for the signing.

Is this mis-information on the NNA's part? This is the basis I used for doing my taxes the last couple of years. Does anyone else have more info?

Reply by PAW_Fl on 2/16/05 4:09pm
Msg #20865

Re: Thank you...This is what I found out.....

>>> According to the Notary Signing Agent Certification Course published by the National Notary Association,( the example on page 360), if there are four documents requiring notarization for two borrowers, the agent notarized 8 signatures for the signing.

Is this mis-information on the NNA's part? This is the basis I used for doing my taxes the last couple of years. Does anyone else have more info? <<<


Yes, it is misleading information being provided by the NNA for most states. California (where the NNA is located) allows a fee per signature. Most states though, such as Florida, allow a fee per stamp or "notarial act". You need to CHECK YOUR STATE STATUTES for the appropriate fees and on what they are based.

Reply by PAW_Fl on 2/16/05 12:24pm
Msg #20804

Re: Thank you...This is what I found out.....

You need to refer to YOUR state handbook, not the NNA's or any others. If no handbook is available, check out the Notary Statutes for Alabama: http://www.legislature.state.al.us/CodeofAlabama/1975/143801.htm

There you will find the fees you are allowed to charge.

Hint: Section 36-20-6 which states:

Fees.

Notaries public are entitled to the following fees: The sum of $1.50 and necessary postage for all services rendered in connection with the protest of any bill of exchange for acceptance, or of any bill of exchange, promissory note, check or other writing for payment and shall not charge any other fees therefor; for any oath, certificate and seal taken under subdivision (1) of Section 36-20-5, $.50; for giving copies from register, $.20 for each 100 words; for each certificate and seal to such copy, $.25; and for giving any other certificate and affixing seal of office, $.50.
(Code 1852, §863; Code 1867, §1090; Code 1876, §5065; Code 1886, §1113; Code 1896, §3033; Code 1907, §5174; Code 1923, §9250; Code 1940, T. 40, §14.)

Reply by Alabama on 2/16/05 1:21pm
Msg #20825

What is your interpretation of the statue

I looked up the very same statue and I really did not know how to interpret it. How would you interpret it, using a standard loan closing and title papers?

Reply by PAW_Fl on 2/16/05 1:48pm
Msg #20828

Re: What is your interpretation of the statue

The allowable "notary" fee that you can charge for notarizing the signatures on mortgage loan documents is specified as the last item in that paragraph: "... and for giving any other certificate and affixing seal of office, $.50."

So, each time you affix your seal, you can exempt $.50 (fifty cents) from your SE Tax calculations. (Up to but not more than the total amount gained from the transaction.) So, if you did a signing and was paid $100.00 and you stamped 10 times, when you did your SE Tax calculation you can exempt $5.00 (50 cents time 10).

Reply by Alabama on 2/16/05 2:45pm
Msg #20840

Re: Thank you for your interpratation of this.....n/m