Posted by ssdn on 3/26/10 10:48pm
Msg #329184

Tax Questions

I no this is a simply questions, But if you are adding up your notarizations for the year for deductions. If, you notarized a closing that had 7 documents for notarization, and there are two people signing each doc. How many deduction are you going to deduct- 14 or 7?. Thank you for your time. I do appreicate this.

Reply by desktopfull on 3/26/10 11:27pm
Msg #329188

Follow your state laws. In Florida we are only allowed to charge per document regardless of signatures. Some states let you charge per signature.

Reply by Marian_in_CA on 3/27/10 3:44am
Msg #329192

It's not a deduction...

You're talking about a credit, not a deduction. They are very different things even though they have the same essential purpose of reducing your taxes.

You still have to pay federal taxes on your notary income, it's just exempt from the self-employment tax, *if* you choose to take it. I've said here many times that I personally, don't think it's a good idea to take the credit unless you absolutely know what you're doing. Taking the credit will reduce your social security credits and will impact your disability insurance eligibility (SSDI). This could equate to many thousands of dollars of future benefits or assistance.

Quite often, the amount of the credit does not begin to equal the potential loss that could occur in the future, especially if you become disabled sometime in the near future. I only caution you about this because of my own experience in the matter. Don't take the credit unless you REALLY, REALLY know what you're doing or you have an accountant tell you it's okay.

To answer your question, though --- what equates to a notarial act in your state? You can take the credit for whatever you charged for each notarization.

In California, that means per signature. I assume that's what it means everywhere else, too. Also, you can't just take the maximum per signature fee and multiply. You can only take the credit for actual fees charged. So... add them up!

Reply by ssdn on 3/27/10 4:14am
Msg #329193

Re: It's not a deduction...

Thanks to both of you, this clear up what I was looking for. Yes, I will be thinking about which way I will proceed. On the benefit of reducing my overall income, it may not be worth it.
Have a great weekend to you both.,

Reply by PAW on 3/27/10 7:45am
Msg #329202

To add to the posts above ...

The amount that you can claim may be less than the sum of the notarial acts. For example, if you completed a signing for $100 that had 12 notarizations and you are 'allowed' to charge $10 per notarization, you can not claim the full $120, only $100. IOW, your claim cannot exceed the amount earned.

As for taking the exception on your SE taxes, what Marian said is very prudent. However, those of us who are already receiving SS benefits, it probably wouldn't hurt. (Remember, there are instances where the maximums one can earn before it reduces your SS benefits. Check with your tax advisor or the SS administration for particulars in your own situation.)

Reply by MW/VA on 3/27/10 9:02am
Msg #329204

I'm guessing your talking about the "notary fee" exemption from self-employment tax on your federal return. I keep track of the # of notarizations per signing (not signatures) and multiply that by $5 (the fee allowed per notarization in my state). My exemption exceeds my profit, and I end up paying no SE tax.

Reply by RJE/MI on 3/27/10 9:18am
Msg #329206

I asked my Tax Accountant

if/how taking the exemption now would affect me during retirement. He told me that because I am married my retirement benefits would be based on whoever makes more money. My husband or me? In my case it is my husband. So for that reason on my Accountants advice I take the exemption now.

Please don't take my word for it. I'm not an accountant hence the need for me to have one.

Reply by Linda_H/FL on 3/27/10 9:32am
Msg #329207

I'm going to respectfully disagree with your tax

accountant - your Social Security benefits for retirement are based on YOUR contributions, not your husband's - and in order to be eligible to collect SS you need to have contributed for a minimum number of quarters (40 I believe)....your husband's social security contributions, withheld from his pay, are credited to HIS benefit, not yours. You each should be getting your own individual annual statement from Social Security outlining your "quarters in" status and all benefits you're eligible for as of that report date.

Reply by bagger on 3/27/10 9:41am
Msg #329208

Re: I'm going to respectfully disagree with your tax

However, when one spouse dies, the remaining spouse collects the higher of the two benefits.

Reply by Linda_H/FL on 3/27/10 9:44am
Msg #329209

Well, that's not what she said

"He told me that because I am married my retirement benefits would be based on whoever makes more money"

And that's what I was responding to...

Reply by Sylvia_FL on 3/27/10 9:46am
Msg #329210

Re: I'm going to respectfully disagree with your tax

My benefits are based on Bruce's contributions as I have very little paid into SS if anything.

Reply by Linda_H/FL on 3/27/10 9:59am
Msg #329212

Re: I'm going to respectfully disagree with your tax

Interesting - my husband worked for the post office and, therefore, has only minimal paid in from prior employment (he paid into Civil Service Retirement, not social security) - his benefit statement says he's not met his quarters so he is not eligible to collect.

Reply by KODI/CA on 3/27/10 2:13pm
Msg #329247

Who gets whom's money.

As a Calif. Registered tax preparer, when I do taxes, this question comes up all of the time.

Whomever has had contributions made to their own SSA account will collect based on that account as long as both husband and wife are alive.

Can both collect SSA at the same time? Absolutely. My wife worked 39 years and collects her own check. I worked 49 years and collect my own check.

Upon the death of either one of us, the largest check will be the check that goes to the survivor.

Hope this helps clear up the confusion.

Reply by John_NorCal on 3/27/10 2:32pm
Msg #329250

A bit of planning advice.......

Something that has been advised is that the person, assuming it's the husband, reaching retirement age first should consider taking their benefit based on the spouses record, assuming the spouse had a lower income and then freezilng their own benefit. Then when that person reaches age 70 they take the benefit based on their own record. The benefit will be higher than if they had taken it at 66 because it increases 6% per year until it reaches the maximum at age 70 at which time it must be taken.

Reply by Linda_H/FL on 3/27/10 2:54pm
Msg #329252

Re: A bit of planning advice.......

And what happens when the lower-contributing spouse reaches eligibility - two people can't collect on the same benefit can they? And you're allowed to change your collection option - you're not locked in?

Just some random questions..

Reply by bagger on 3/27/10 5:32pm
Msg #329268

Re: A bit of planning advice.......

When both are alive, BOTH collect their benefits. When one dies, the surviving spouse collects the higher of the two benefits. It's that simple.

Reply by Dorothy_MI on 3/27/10 6:34pm
Msg #329277

And we don't want to even talk about

what happens in the case of divorce. I have a friend who was in business with her husband. Their account recommend that they put all the salary on the husband so they would pay less SS taxes (reach the limit sooner). They did. 15 years later got divorced. Guess what, she get only a little more than 1/2 the amount he does (but they saved all those pennies years ago).

Reply by bagger on 3/27/10 6:42pm
Msg #329278

Re: And we don't want to even talk about

OUCH!
This reminds me of the old adage about doctors.

What do you call a doctor that graduated at the very bottom of his class? eg 250 of 250?

You call him DOCTOR

Reply by Sylvia_FL on 3/27/10 8:50pm
Msg #329287

Re: A bit of planning advice.......

" two people can't collect on the same benefit can they?"

Bruce is retired and collecting Social Security, I collect roughly half the amount he does. Not having paid into it I can collect on his
So two of us are collecting on his benefit.

Reply by MW/VA on 3/28/10 8:20pm
Msg #329373

Re: A bit of planning advice.......

And potentially 3 can collect on the same benefits--say a man who has more than one wife--both can collect on his.

Reply by Linda_H/FL on 3/29/10 10:02am
Msg #329408

Re: A bit of planning advice.......

"say a man has more than one wife" - okay...now you've really confused me...

Since bigamy and polygamy are illegal in this country I'd think anyone other than the current wife/spouse would have no claim whatsoever (unless some court has ordered otherwise)....

Reply by jba/fl on 3/29/10 10:13am
Msg #329410

Re: A bit of planning advice.......

I don't know, but thought I had "heard" that if married for X or more years, a previous wife/husband may have some claim.

Interesting and waiting for someone more knowledgeable.

Reply by Linda_H/FL on 3/29/10 10:20am
Msg #329414

Maybe meant married more than once? n/m