Posted by SReis on 1/11/09 5:58pm
Msg #274176

Tax Question....

I know that we can claim the # of notarizations we do for Self Emp tax purposes. My question is, do you count it in the year the notarization is done (ie: like mileage) or do you base it on the year you recieved pymt for the service (ie: I closed a loan on 12/31 w/ 3 notarizations but did not recieve pymt until 1/10, would I claim those notarizations in 2008 or 2009?). This may seem like a stupid question to some but I just realized that I screwed up my mileage for last year because of this same thing. TIA & I will not hold anyone liable for their advice ;-)

Reply by SReis on 1/11/09 6:06pm
Msg #274179

Meant to add...

Sorry, I meant to add that I thought it would be in the year income is received for the service because that is when we are trying to offset the SE tax. But I could be wrong & hoped someone else would have better tax knowledge than myself. Thanks Again ;-)

Reply by Teresa/FL on 1/11/09 6:07pm
Msg #274180

I think it depends on if you use the accrual or cash method to compute your income.

With the accrual method you count all income as earned on the date you performed the service. With the cash method you count all income on the date you receive payment for the service.

Reply by Jon on 1/11/09 6:07pm
Msg #274181

Your best bet is to see a tax professional. Please don't rely on tax advice from a notary board, while there are several preparers on this board, how do you know which ones are good? I know several of the good ones, but why would you take my word for it?

Spend the $$ to get competent advice from a local expert.

Reply by SReis on 1/11/09 6:09pm
Msg #274184

Thanks Jon, but my tax rep didn't even know about the notary SE thing the first couple of yrs I was doing it & hence, I never received the discount until I read this board. I do use the cash method & therefore think my original assessment is correct. Thanks All!!!

Reply by John_NorCal on 1/11/09 6:11pm
Msg #274185

Did you amend your return for the previous 3 years? You can do that, a word of caution though, when you amend a return then you establish a new statute of limitations for that return.

Reply by SReis on 1/11/09 6:18pm
Msg #274188

No..

I figure its not worth my time or effort at this point to file the amendments, esp. since I would have to backtrack to calculate all of the old notarizations. Its really only for 1.5 yrs anyway. Thanks for all of your help!!

Reply by Jon on 1/11/09 6:17pm
Msg #274187

"...my tax rep didn't even know about the notary SE thing the first couple of yrs I was doing it & hence, I never received the discount until I read this board."

You may want to consider finding another tax rep. Also, if you kept good records you may want to consider filing amended returns for the years you didn't receive the "discount". In addition, depending on your personal situation, you may not want to take advantage of the SE exemption. Again, it depends on your situation, but discuss it with your tax rep.

Good luck

Reply by SReis on 1/11/09 6:23pm
Msg #274190

Thanks, Jon. I was using H&R Block, who I soon discovered had NO Knowledge when it came to "unusual" tax circumstances (Not that I would really call my situation unusual, other than that I am SE). Like I said above, I've decided to forgo the deduction for those 1st 2 years because it would be too much of a headache to try to figure everything out & then go through the whole tax process. Thanks Again, I just LOVE tax season (NOT!!)

Reply by John_NorCal on 1/11/09 6:35pm
Msg #274193

**Again, I just LOVE tax season (NOT!!)**


Heh heh .... I love it! Busy time!

Reply by John_NorCal on 1/11/09 6:08pm
Msg #274183

It all depends ................. Are you a cash basis filer? If so then you claim it in the year that you receive payment i.e., 2009

If you are an accrual basis filer then you claim it in the year that you earned the income i.e., 2008

I would venture to say that you are most likely a cash basis filer.

Reply by sueharke on 1/11/09 9:51pm
Msg #274203

I am speaking as a CPA in this response. If you are on the cash basis of accounting, count the income in the year the payment is received. If you are on the accrual basis of accounting, count the income in the year the services are rendered.

Reply by JanetK_CA on 1/16/09 3:10am
Msg #274627

I think the question was about what year to deduct the allowable amount for notary fees for which we aren't required to pay SE tax. Since we might be doing the actual notarization in one year, but receiving the payment in the next.