Posted by Ronald Philbrick on 12/11/06 1:05pm
Msg #165251

Tax time

Does anyone remember the reference to Notaries deducting the actual notary fee from our 1099 we get? If I understand what I read last year: = W9 for $75 for total job, then we can deduct say $15 if we notarized 3 place , paying taxes on $60.

Any help?

Ron

[e-mail address]

Reply by Poppy on 12/11/06 1:22pm
Msg #165256

Ronald, the only savings/deduction is for the self

employment tax..
You still need to pay income tax on the entire fee...
You only pay the self employment tax on the fee over and above any notarizations.

Reply by Charles_Ca on 12/11/06 1:34pm
Msg #165262

Re: Ronald, the only savings/deduction is for the self

If you itemize your return however you can deduct for many items used in business. I am not a tax professional but I have one and he saves me a bundle evry year: more than pays for himself.

Reply by TaxMan/NC on 12/11/06 4:43pm
Msg #165293

See IRS Pub 525...

and note what it says about Notary Publics. You do have to pay income tax on all the money you receive as a notary signing agent, BUT you do not have to pay the separate self-employment tax on the amount received for notarization fees. This means, for example, if you received $50 for a closing and $20 of that was for notarization fees then you report the full $50 on your Schedule C Gross Income, but you exclude the $20 on your Schedule SE (Self-Employment tax calculation) by making a note "Exempt-Notary $20" on line 3.

This means you have to keep very precise records for each closing to determine which portion of your fees was for notarizations (based on what your state allows per signature) and which portion is pure "signing agent" fees. It's a lot of work, but it can save you a lot since the self-employment tax is currently 15.3%.

Clear as mud? You can go to irs.gov and search for IRS Pub 525 (Taxable and Non-Taxable Income) and the instructions for Schedule SE. Or just see your friendly neighborhood tax man/woman

Reply by Roger_OH on 12/11/06 1:33pm
Msg #165261

ALL notary income is subject to federal taxes...

as well as state and local taxes where applicable. You can deduct the SE portion on your form 1099; The TurboTax software will do this deduction for you automatically.

You must report ALL income, even when a company has not issued you a 1099 form! Don't get caught undereporting. Have a good CPA or tax pro in your corner.

Reply by Larry/Ca on 12/11/06 2:28pm
Msg #165266

Is it the small business edition....

of turbo tax that will handle a partnership or will the less expensive 'deluxe' do it also. I always use the method of having it ask you questions, does it actually ask you if you have notary income?

Larry

Reply by Gary_CA on 12/11/06 2:41pm
Msg #165269

One of them says it will do a schedule C

I forget which...

but if I had a partnership, I'd be inclined to pay and have the taxes done by a pro... not just IRS issues, but possible future partner squabbles as well.

FWIW

Reply by Larry/Ca on 12/11/06 2:50pm
Msg #165271

Re: One of them says it will do a schedule C

1065 is the form I need to use, and yes I am going to a pro with my taxes but I want to do them myself first to see if future use of a tax pro is warranted. My wife and I do argue but not with respect to this partnership. I do all the work and she spends all the money. We do split 50/50 for purposes of the tax filing.

Larry

Reply by Nancy Korb on 12/11/06 11:27pm
Msg #165331

Re: One of them says it will do a schedule C

I tried that last year. That schedule K is a killer...finally broke down and sent it to the CPA...easier.

Reply by Teresa/FL on 12/11/06 3:03pm
Msg #165276

Re: Is it the small business edition....

The Deluxe Edition does not include Form 1065. It doesn't specifically ask about notary income, but you can do a search and it will tell you where you need to make the entry to exclude your notary income from the SE tax.