Posted by OR on 1/3/10 1:58pm
Msg #316480
Gota love Quickens and Turbo Tax w/ math question
With the investment in both of them my tax's are almost finished.
From the Self Employment Tax (tax rules) it reads.
Your NOTARY PUBLIC INCOME is your income minus your expenses.
If your notary income is part of the income of a business, you must prorate the income received as a notary. To do this, divide the total notary public income by the total income and multiply this number by the net income from the business."
Is this what they are saying to do? Based on If I made $600 (with $145 of that is for my notarizing) with $20 in expenses. Then do I take $145 divided $580=sum--which is 25%------then multiply net income benign 580 x 25%=$145 as my self employment adjustment. Am I right here or not. I hate word math problems. TIA lots and lots
JoAnn Baracosa
Simple Solutions Notary Service
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Reply by desktopfull on 1/3/10 2:45pm
Msg #316481
Your notary fees are supposed to be exempt from SS taxes. You take what you are paid for doing the job and substract the amount you are allowed for the value of your notarization. Example: Closing paid $150.00. 10 notarizations in package (in FL we are allowed $10.00 per document) value of notary fees = $100.00. You get you total net income (gross minus business deductions) and subtract the value of your notary fees, the balance is what you owe SS tax on. You must check the box for notary exemption or they won't be calculated correctly with Turbo-Tax.
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Reply by JanetK_CA on 1/3/10 3:16pm
Msg #316486
I think that's a totally different issue from the one being asked, although I admit I didn't find it very clear. Also, it is completely optional, not a "supposed to"... Some people prefer to pay the self-employment taxes on notary fees so that their Social Security retirement income is greater, since that is based on the total amount paid in.
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Reply by Julie/MI on 1/3/10 4:23pm
Msg #316497
Not counting on SS
I'm 43 years young and there is no way I think there will be a penny left in social security by the time I retire (I'll probably never retire).
I have no faith in the system nor it's management, so I like to put aside and invest myself instead of having the government do it for me.
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Reply by JanetK_CA on 1/3/10 6:51pm
Msg #316519
Re: Not counting on SS
I remember thinking that way, too...  I hope you are taking steps to sock away a lot of money in savings and investments. Counting on staying healthy and able to continue to work seems to me to be a pretty big gamble. A healthy lifestyle helps, but there are no guarantees.
As for whether or not SS will still be around... well, only time will tell.
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Reply by Linda_H/FL on 1/3/10 2:52pm
Msg #316482
Doesn't the formula apply only if your notary
public income is incidental to another business income? (e.g. Accounting business that does *some* notary work)...
I use Turbo Tax and have always been able to do my returns like DTF...always have the option to separate out notary fees from business income.
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Reply by OR on 1/3/10 3:14pm
Msg #316485
Re: Doesn't the formula apply only if your notary
"DTF" Well I did not find that this year. Turbo Tax has a format change this year. So on the right side I looked in "Show Topics list" and found Self Employment Tax and there is where found the box to input the notary income. I clicked "more information" and found the formula I posted. Linda I do the same as you and claim my notary pay separates to my travel and print fax and shipping fee. Turbo Tax says "if you income as a notary is "part" of a business you must prorate and it gives the formula I posted. If you follow the formula you will get a slightly larger SS adjustment.
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Reply by JanetK_CA on 1/3/10 3:27pm
Msg #316487
Re: Doesn't the formula apply only if your notary
Keep in mind that this applies solely to the part of your income that is "per notarization"as allowed by your state. It does not include "signing agent" income.
So if your state allows $10 per notarized signature, as in California, and you do a signing package with two docs notarized by two people (four signatures) and you get paid $100 for the job (to keep it simple), you can only exclude the $40 that can be considered "notary income". Conversely, if there are 6 documents to be notarized by two people, you cannot exclude more than the total fee for that signing. So in that example, you could exclude the full $100 you were paid for that assignment, but not $120, which would be 6 signatures x 2 people x $10. In other words, if these examples represented two different assignments, you can't use them to offset each other.
Naturally, this requires the proper record keeping in advance. If you can't produce the right information - and be able to document it in an audit - you may be better off not taking that exclusion from your taxable income for self-employment tax. (This exclusion does not apply at all to your total for income tax calculation.) There are several on this board who recommend you not take that exclusion at all -- or at least very carefully consider the consequences for your particular situation before you do.
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Reply by Linda_H/FL on 1/3/10 3:36pm
Msg #316488
Thanks Janet...
That's what I've been doing for 3 reporting years - got a lil nervous reading this as I don't look good in a jumpsuit...
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Reply by Jodith Allen on 1/3/10 3:37pm
Msg #316489
Re: Doesn't the formula apply only if your notary
My mother worked for Social Security taking applications. She said self-employed folks were often unhappy when they realized that the amount they paid in self-employment taxes affected how much they received from Social Security when they retired.
It is important when you're self-employed to look at how those decisions will affect your retirement income, especially if your SS will end up being the large part of your retirement.
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Reply by BrendaTx on 1/3/10 3:46pm
Msg #316493
"Amen!" to all the cautions in this thread. n/m
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Reply by OR on 1/3/10 4:56pm
Msg #316505
Re:Turbo Tax has changed. Here is how they say it
"If your notary income is part of the income of a business then you must prorate the income received as a notary."
I think we agree that we can use the adjustment if we "wish too".
There is a formula that is given this year. I was wondering if I did it correct. It is in my first post. I am looking for someone to check and see if I understood that it was saying. TIA Thanks to everyone that has chimmed you all have great points. Have a great day
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Reply by KODI/CA on 1/3/10 5:33pm
Msg #316509
Re: Re:Turbo Tax has changed. Here is how they say it
I do not know about Turbo Tax, however, I am a California Registered Tax Preparer and the current publication 17 (tax year 2009) from the IRS requires notary fees (only the signing fees) be reported on 1040 - schedule C - schedule SE. I use Intuit Pro Series to do my clients tax returns and that software follows that reporting process. Hope this helps.
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Reply by OR on 1/3/10 5:45pm
Msg #316510
Re: Re:KODI thank you
I looked at the publication 17. I did not see that infrmation. Could you post a link. TKS
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Reply by Linda_H/FL on 1/3/10 6:05pm
Msg #316513
Re: Re:KODI thank you
http://www.irs.gov/pub/irs-pdf/p17.pdf
I'm jealous JoAnn...how do you manage to have all your info together to do your taxes already? I probably won't have all my stuff in until end of January....
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Reply by OR on 1/3/10 6:41pm
Msg #316516
Re: Re:I thank you Linda for the link
I am a person that has to have every day finished, ever detail done, every day that it happens in, nothing rolls over into tomorrow if I can help it in any way. And I just went with my Quickens figures. They match my bank reccords. Everything should be fine. I will wait for my 1099's before filing however. Thanks for asking.
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Reply by OR on 1/3/10 6:51pm
Msg #316518
Re: Re:Ok I found it on Page 96 from pub 17
It says we have to claim all income we make form Notary Work form C. That is what I thought. But SS we don't have to pay.
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Reply by KODI/CA on 1/3/10 9:39pm
Msg #316531
Pls check your PM. n/m
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Reply by Lori Kreppert on 10/11/10 2:11pm
Msg #356299
Re: Pls check your PM.
PM? what does that mean?
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