Posted by unknown on 1/17/05 11:24pm
Msg #17151

Notary Taxes

I have a question for those of you who have been at this for a year + or more. My question to you is at tax time. are we required to claim every cent we made as notary and pay taxes on it all (less the $ we are allowed to charge by state law per notarization) wether we get a 1099 on it all or not? Or do we only pay taxes on every cent we earned even if we don't get a 1099 or not.
From what I have read it is my understanding that we have to pay taxes on everything we make (less for the notarizations amount allowed in your state) regardless if we get a 1099 or not.
Can someone please clarify this for me. This is my first year paying taxes and I want to make sure I am thinking correctly. Granted I will be having a professional do my taxes, I just wanted to know up front.
Any help you can offer would be great.
Thanks!

Reply by Jon on 1/17/05 11:43pm
Msg #17152

You are required to report all income, whether or not you receive a 1099. You have to pay taxes on the total amount of your net income, including the amount for notarizations. What you do get to do is exclude the amount of your notarizations from your SE tax. Keep in mind that SE tax is for social security and medicare, so the smaller amount you pay in will dictate a smaller benefit when you are "of age".

Reply by Bob-Chicago on 1/17/05 11:43pm
Msg #17153

Good idea about hiring a tax pro
You have to declare gross income on your for "Schedule C" on all income recd (INCLUDING the amount allowed for notarization per state law) even if you do not receive a 1099 from each payer. !099 is only reqd if a company paid you in excess of $600 in one year.
You need not include the notarization allowance for purpose of computing self employment taxes for the lesser of state law allowance per notarization for each signing , but not more than the total amount paid for that signing.
(eg: state allowance $5/ notariztion. 20 notarized docs. fee is $75- Declare $75 as gross income and $0 for self empoymnt tax--- Fee $125 , declare $125 for gross income and $25 for self employment tax
Now go hire that pro to make sure.

Reply by Bob-Chicago on 1/17/05 11:49pm
Msg #17154

P.S. I am giving you a break

I will normally not repy to post with chatchy names lilke "unknown" Or "Notary" Many others feel as I do.
The only reason that I did respond to your post was I wanted to make sure that no one thought that any part of notary income was exempt from Federal Income Tax

Reply by Nd_WA on 1/18/05 3:24am
Msg #17160

I learned from an income tax class many many years ago that you are required to file your income tax with the IRS even if you rob banks for a living.

You do need to report every penny you earned as gross income.

Reply by Carolanne_PA on 1/18/05 5:41am
Msg #17161

Bank Robbery - Form 1040, Line 21, Other Income.

Reply by thnotary_NY on 1/18/05 9:06am
Msg #17173

If that's the case; Robin Hood should amend, for his charitable givings. :P

Reply by Carolanne_PA on 1/18/05 9:16am
Msg #17174

When I took my first tax course nearly twenty years ago this topic was brought up. The one that comes to mind is Al Capone, who was arrested for tax evasion. The instructor mentioned that the taxpayer could list criminal activity as the source of income without admitting to the nature of the crime. However, none of my clients admit anything ever. In fact, their favorite saying seems to be "same as last year".

Reply by Happy in Fl on 1/18/05 1:23pm
Msg #17218

Thats the same as saying "Ain't caught me yet" hey?

Reminds me of the guy that jumped out the sky sraper window-- everyone watching the drama unfold- on the floors below, heard him say as he was going by, "SO FAR SO GOOD!"