Posted by JulieD/KS on 1/1/11 10:11am
Msg #366639
invoices & tax time
Now that tax time is here, I want to remind you that the portion of your signing agent income that is for notary services can be deducted from the self-employment income on which you will pay self-employment tax. Self-employment taxes are separate from income tax. S/E tax is figured on Schedule SE. On page 2 Line 3 of Schedule SE, you put your notary earnings and it is subtracted out. This can be a significant savings so I hope you are keeping track. But, how do you keep track?
This is how I do it. When I create an invoice in Quickbooks for a loan signing (or any notary job), I have templates created to make it easy to be sure I get all the information I need. This is how it is broken down:
Part 1:
Loan Signing Services - Order Number: 947311
Doe, Jim and Doe, Jane (22 Dec 2010 Wednesday at 6pm )
Address: 11908 W. 131 St, Anytown KS 66212
FedEx Tracking Number: 79xx-21xx-15xx
Title Company: American Title, 7901 N. 16th, Anytown NY AZ 11111
Part 2:
Loan documents received via email, printed and copies made for borrower.
Docs promised by: 2pm 12 Dec 2010 Docs arrived at: 1pm 12 Dec 2010
Page Count as promised: 75 Actual Page Count: 98
Part 3 is where I get my notary income information:
Notary Service: Total Notarized Signatures: 8
Mortgage x 2 signatures; Signature Affidavit & AKA Statement (Neil); Signature Affidavit & AKA Statement (Joy); Ltd Power of Atty x 2 signatures; Affidavit as to Debts, Liens, Possession and Taxes x 2 signatures;
Part 4 is how I protect myself if a company fails to pay (it goes hand-in-hand with what is in the email I send them when they hire me):
This invoice is due and payable net/30 to Dailey Business Solutions, LLC regardless of the funding outcome.
A 5.0%, but not less than $5.00, late charge will apply to unpaid balances as of 5:00 PM (CT) on the past due date.
When I create the invoice, I put in the amount charged for the signing by Part 1. The amount for edocs goes by part 2. Part 3 has no dollar amount until after I have printed the invoice for the company. Then, I alter my invoice to reflect the amount of the signing fee that is actually for notary service. (The bottom line will always be the same.)
Come tax time, I pull up a Year-To-Date Financial Report for that year, and it will have my notary income nicely added up for me to put on Schedule SE.
Remember that Line 31 of your Schedule C is carried to Line 12 of your 1040; it’s only for Self-Employment tax purposes that notary income is deducted. Good luck and happy tax time!
| Reply by Linda_H/FL on 1/1/11 10:35am
Msg #366643
I don't have that much information on my invoices - my invoices simply state the borrowers'/signers' name, purpose (loan signing, respa signing, general notary), a block describing what was done (property, lender name and loan no., title file number) and amount agreed.
At the top I mark my invoice as to the amount credited to notary stamps and excess - example: a $150 signing with 8 notarizations @ $10 per - at top I'd mark 80/70...also keep the record like this in my journal - fee is broken down 80/70 with date paid.
I then keep a notebook with a list of monies received in columns - date paid, who paid, name of file, total received, stamps, fee.
12/10/2010 - XYZ title - Jones refi - $150 - $80 - $70
Total columns at end of year and I have total income, exempt income, other income.
Archaic to some ... probably - but it works for me.
| Reply by JulieD/KS on 1/1/11 10:46am
Msg #366644
Granted...my invoice is really thorough and it took some time to create the templates, but it's easy when time to create a new invoice. For those who have a system in place, that's great. I was reaching out to those who don't have a system in place.
Happy 2011! Here's to a prosperous year!
| Reply by Moneyman/TX on 1/1/11 12:04pm
Msg #366650
Thanks Julie for the reminder!
I have to change accounting software this year. Microsoft Accounting hasn't worked properly since a computer crash in mid '10. I've been looking for the past 2 months but have not been able to decide on what program I should use.
Obviously, you like Quickbooks.  What version do you use? I realize that you are also a tax preparer and you might use a higher version than what might be needed for someone with only one or two business, if so, what version would you recommend if not the same one you use?
I break down my notary fees on my invoices as well. I also have an Excel workbook that I created that also calculates my mileage and keeps track of it (and the total deductions) on a MTD and YTD bases. Same thing for the breakdown on each signing for notary fees. It takes about an extra 1-2 min of invoicing time (2 different programs), but come tax time I go to the YTD page and hit print. All numbers are automatically transferred as I input each signing information. Well worth the hours to set up in Excel several years ago.
Happy New Year to everyone!
| Reply by JulieD/KS on 1/1/11 12:51pm
Msg #366651
I don't do accounting so my version of QB is old. I've partnered up with a bookkeeper, though, and am going to have her mentor me. I occasionally am asked to do bookkeeping but I have resisted. I will have to get a newer version of QB if I take it on. The bulk of my software expense is with tax software each year.
Your excel spreadsheet sounds fabulous (from one Excel junkie to another, it sounds like!). I was sitting on the sofa adding up all my mileage this morning. Perhaps a spreadsheet would serve me well. I have 3 separate businesses that rack up mileage. Would your spreadsheet work for such a situation?
I think I'll go find a good New Year's Buffet and eat a good meal.
| Reply by Roger_OH on 1/1/11 1:39pm
Msg #366654
The BIG question about SE tax exemption is...
is it in your best interests to take it?
There have been a number of past postings about the potential perils of NOT paying into Social Security, and subsequently having enough credits for retirement and/or disability income.
You need to evaluate your own situation, but realize that an SE exemption taken now may result in reduced benefits later.
| Reply by Susan Fischer on 1/1/11 2:01pm
Msg #366658
Excellent reminder, Roger. n/m
| Reply by Jorge Reyes on 1/1/11 8:39pm
Msg #366694
Re: The BIG question about SE tax exemption is...
hello everyone; this is the frist time me replying to a forum, but if I may give MHO I agree with Roger Oh, years ago I had that question in my mind everything about SE tax and also thinking about my future, well talking to my CPA and attorney, what i did was create a corporation, and My corportation pays me as a employee, maybe its me but who knows what hangs in the future but I am for one that I want to be secure, I still make great money, but what I do is file 2 tax forms.
Thank you
| Reply by Linda_H/FL on 1/1/11 1:51pm
Msg #366656
I use Quicken Home & Business
Keeps invoice, mileage, etc etc and will do the mileage for multiple businesses..I also keep track of our medical mileage with it - then end of year I run the reports....done...
I have to start pulling reports together too - just don't feel like doing it today..
| Reply by OR on 1/1/11 5:01pm
Msg #366680
Re: I use Quicken Home & Business too.
Everything is right there and ready to go. Last week when the cable man was here I added up my notary signatures. Oregon allows $10.00 this year. I have all my taxes finished daily. I l
love Quicken Home and Business for that reason. I compaired the figures to my business bank account it all matched up. My tax's are done. I am waiting for the government to get their act together. Plug in the numbers and send it all in. Quicken Home and Business is just that simple.
| Reply by Moneyman/TX on 1/1/11 7:18pm
Msg #366689
Thanks Julie, Linda, & JoAnn. Think I may be sold on that
program. It was one of the top 2 I had been looking at.
Does it integrate with Outlook? I used to use ACT in my financial services business but use Outlook now.
| Reply by OR on 1/3/11 9:56am
Msg #366817
Re: Thanks Julie, Linda, & JoAnn. Think I may be sold on that
I don't think it intrgrates with outlook. You can email you invoices right from QB.
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