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Posted by Kellosh/CA on 4/5/21 5:49pm
My tax agent did a deep dive on this when I started making some significant income from my notary work, and I rely on her research. I can categorize the market value of the notarizations I perform as part of a closing as notary income, not subject to SE. In California, we can charge up to $15 per signature notarized. So if I take a job for $100 and only notarize one document with two signers, $30 of that is notary income, and $70 of that is self-employment income. If a $100 has 10 documents with two signers, the market value exceeds the payment, and therefore the whole $100 is notary income.
And, yes, in my opinion, given that CA has such a high market rate on notary fees, it is WAY worth my time to figure that out. It saves me thousands in taxes each year. (I run two unrelated businesses, so that's part of it as well).
What this results in as that, although I made high mid-5 digits last year, only about $6000 of it was considered self-employment income. Apparently that's not high enough to qualify for a SEP IRA. (As stated before, Roths are not an option for me - my husband makes mid-six figures, so we don't qualify for that.) |
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