Posted by Kenny Services - Dawn on 1/5/12 5:20pm
Msg #408297

Confused and have questions for tax purposes

I am hoping someone can shed light on this because i am confused. When entering my information in my software on my closings, it will ask me for tax purposes how many documents, and how many signatures. Since I have to print a borrowers copy as well as a lenders copy do I include both sets or just the borrowers? Also, am i counting just how many of my signatures in the package, or the borrowers or both? Nothing clearly states how to do this, Thank you for any help you can give me on this.

Dawn

Reply by Linda_H/FL on 1/5/12 5:30pm
Msg #408298

How are you allowed to charge in your state...

by signature or by notarial act? That's the only thing you can take into account in preparing your taxes because the fee you charge per notarization or signature is exempt from self employment taxes.

Pages printed or how many sets only comes in when you're figuring what to charge for a print fee - and perhaps the cost of the paper used during the year, if you count each page you printed through the course of the entire year, to be used as a deduction - I usually just claim the cost of the paper, based on the paper I buy is for my business so it's a business expense.

Perhaps your software is based produced in CA, where notarizations are per signature?

Just a thought.

Reply by Buddy Young on 1/5/12 6:26pm
Msg #408310

Just include the lenders copies, you don't notaize anything in the borrowers package.

Signatures, include how many times you use your stamp.

Reply by JanetK_CA on 1/5/12 6:34pm
Msg #408314

"Signatures, include how many times you use your stamp."

Actually, this will vary from state to state. Some states allow a notary to charge so much per notarial act. In California, we can charge per signature, so it doesn't matter how many times we use our stamp.

You also can't deduct for more than you actually earn on a particular assignment. So if your state fees would allow for $120 to be charged if you were billing as you would for General Notary Work, but you were only paid $100, you can only deduct up to $100 on that particular assignment. Bottom line, it's not as easy as just adding up all the times you used your stamp or every signature you notarized, as the case may be for your state.

Reply by John Tennant on 1/5/12 6:44pm
Msg #408315

Please check your PM n/m

Reply by Glenn Strickler on 1/5/12 6:46pm
Msg #408316

Hopefully, you are using a tax preparation program such as Turbo Tax or Block etc. They simply ask you to enter the amount you earned performing the notary function. The program will do the rest of the calculating. However, as pointed out what you enter depends on what your state allows you to charge per stamp or signature or however your state law specifies.

But don't enter more per loan package than you actually were paid for the entire job. When I was audited a couple of times, that was one of the first things I had to prove.

Reply by MW/VA on 1/5/12 7:28pm
Msg #408317

Taxes for notaries 101. There's always a lot of confusion

on this, so I'll attempt to cover the basics. I file a Schedule C for business, showing any income from signings & general notary work less all expenses & mileage, etc. That will give the profit. You will pay federal income tax on that amt., as well as state taxes if that applies.
The profit is also subject to Self-Employment Tax (social security & medicare). It's a hefty amt. (used to be 15.6%). There is a unique exemption from SE Tax for "notary fees". You can arrive at that by taking the no. of notarizations x the amt. allowed in your state for notary fees. Do not confuse it with the no. of signings, pages, copies, etc.--only no. of notarizations. I know I end up with more in exemption than profit, and haven't paid SE Tax. That's also controversial, for those who are trying to build their ss accounts for the future. Some take the exemption, and some don't.
I use Turbo-Tax, and the calculations are built into the program, but I'm still the one that has to provide the nos. BTW, I make a note of the no. of notarizations (notarial certificate & stamp) for each loan signing, total it weekly, monthly, then for the year.
This is the simplified version, and you can always get more info on IRS.gov, from your tax professional, etc.

Reply by C. Rivera Chicago Notary Services on 1/28/12 10:24am
Msg #410155

what kind of software are you usig? n/m