Posted by Mike Photon on 8/25/06 4:22pm
Msg #140987

Journal Entry for Loan Signing

When I did a loan signing, I quoted my fee and sent the TC an invoice. The invoice didn't show a break up of notary service fees, travel expenses and others. My question is, does it matter what I put in the fee column in the journal as long as it doesn't exceed the maximum allowed by law.
Is it a good idea to show the maximum amount as notary service fees?

Reply by Kate/CA on 8/25/06 4:35pm
Msg #140990

If I make 100.00 for a signing and only do three notarization, then I'm going to put $10.00 for each notarization. If I get $75.00 for a signging and I do 10 notarization, I'm going to put $7.50 for each signing. This will help you by being able to deduct your notarization fees from the total amount earned less expenses on figuring what you owe SS.

Reply by Mike Photon on 8/25/06 5:00pm
Msg #140992

So you are saying its best to put the maximum possible amount on notary services.
I don't understand what you meant by "what you owe SS". Why do we owe anything to SS after signing?

Reply by Mike Photon on 8/25/06 5:01pm
Msg #140993

On a related note, what are the tax implications (if any) in showing more amount in notary service fees versus expenses?

Reply by Kate/CA on 8/25/06 5:17pm
Msg #140995

At the end of the year you'll have to total all you received from your signings. Yes, sometimes we have to pay SS taxes on our income unless we have enough deductions. I think you may be a little confused over notary service fees deduction versus expenses. When my tax person does mine. The total that I make, then the dedeuctions are substracted. This gets my net. From that the notary fees are deducted only for figuring if I owe SS Taxes. I also must pay federal and state on the net amount.

Reply by MelissaCT on 8/25/06 5:33pm
Msg #140999

SS Taxes -- do you mean SE (Self-employment) taxes?? n/m

Reply by Genkichan on 8/25/06 5:45pm
Msg #141005

What you choose to enter for your notary services per job (whether you choose the max allowed by your state, or something lower depending on how much you made on that one job) will be the total amount of income at the end of the year that is NOT subject to self-employment taxes.

Some people (usually part timers) like to minimize the amount of money they pay self employment taxes on. That's because they have regular day jobs and other sources of income with employers taking withholding for social security, medicare, etc. I fall into this category.

Those full-time signing agents may choose to actually pay self-employment taxes on ALL their income, including notary income (even though they legally don't have to), because there are other long-term benefits of doing so. Examples: 1) the more you pay SE tax on today, the higher your social security (ss) check will be at retirement; and 2) the more you report as SE taxable income each year, the more you can contribute to self-employment retirement accounts that will benefit you more in the long run. I believe those self-employment retirement accounts allow a certain $$ or percent of contributions based on total self-earned income, but that income must also be subject to SE tax or else it doesn't count.

Disclaimer: I'm not a CPA/Tax advisor...you may want to ask a knowledgeable one for the full details of my brief explanation.

Reply by Glenn Strickler on 8/25/06 6:48pm
Msg #141018

Great point on the ss benefits .... n/m

Reply by Glenn Strickler on 8/25/06 6:49pm
Msg #141019

Re: Great point on the ss benefits ....

I forget to think that way because I have paid into ss for 40 years and have plenty of quarters now ....

Reply by Glenn Strickler on 8/25/06 6:44pm
Msg #141016

In case you get an audit you need to be consistant

California allows a max of ten dollars per notarized signature. That fee is not subject to self-employment tax.
The left over amount, regardless of the amount is considered a travel fee and is subject to self-employment tax. I break it down on a spread sheet. So a $150 dollar fee with 6 notarized signatures would be entered as $60 signature charge and $90 travel fees. The only amount I enter into my journal is the notarized signature fee. If you usually do your own taxes, it would be good to get professional help your first year of NSA. Many on the board use Turbo Tax or Tax Cut which asks how much is notary fees ....

A word of caution ... If you charge $75 for a signing and have 8 notarized signatures, you cannot claim a -$5 charge against your travel fees. It is figured on a per job basis. ..