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 Self Employment Tax on Notary income? Computation
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144 Posts

Posted - 03/27/2016 :  6:40:59 PM  Show Profile  Reply with Quote
You are correct about the SE taxes. If you're not retired and not anywhere close to being retired, not paying Social Security tax on your notary fees could affect you if you are disabled in any way before retirement age. Another notary that posts on NotaryRotary said that her husband was caught in that snare, not because of not taking the credit, but because he became disabled at a young age and didn't have enough credits for SSI. Not taking the credit could also help with the amount of Social Security you'll receive when you do retire. A good financial planner could help you with your decision. A CPA generally is just looking at numbers and how to lower your taxes.

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7 Posts

Posted - 03/27/2016 :  07:32:47 AM  Show Profile  Reply with Quote
For years I have been trying to determine how taking the notary exemption will effect my social security benefits down the road...won't it decrease benefits? Maybe it's not in my benefit to take the exemption? Does someone out there know?

Shannon Hobbs
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549 Posts

Posted - 12/10/2006 :  6:39:52 PM  Show Profile  Visit Renee's Homepage  Reply with Quote
If you use Quicken, you can part-out the income on each invoice and have an easier time when calculating your taxes. Quicken will also track your mileage & keep a running total of that allowance, also.
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60 Posts

Posted - 12/10/2006 :  11:38:24 AM  Show Profile  Reply with Quote

Notary public. Report payments for these services on Schedule C or Schedule C-EZ (Form 1040). These payments are not subject to self-employment tax. (See the separate instructions for Schedule SE (Form 1040) for details.)

It is my understanding that Notary fees are subject to Federal and State Income, if applicable in your state but not SE Tax(and yes this is just the notary fees according to your state notary laws, not the travel or edoc fees).

You may ask, what is SE (Self-employment tax).
If you were receiving an actual paycheck from someone you would see a deduction from your paycheck for Medicare and Social Security. The employer has to remit this withholding to the IRS and match it. The percentage deducted from your paycheck for SS is approximately 6.2% the employer has to match that. Medicare is 1.45% and the employer has to match that. So total is 7.65%. So since you are self employed you have to pay both (7.65% x 2). That is SE tax.

this is not to be considered legal advice. I have done my share of payroll and tax remittances. If you have an accountant or tax preparer just alert them to the tax information and they should be able to run with it. If you keep track of all notary expenses and income you should just need to count up your notarizations at the end of each month, each quarter or once a year and that is the only part that needs separated out to be excluded from SE Tax.

Linda Kassis
Midwest Notary Association

Nothing in my posts should be construed as legal advice. I am not a licensed attorney in any state.
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2853 Posts

Posted - 12/10/2006 :  11:04:32 AM  Show Profile  Visit jbelmont's Homepage  Reply with Quote
Another thing is to refer to the page in the 1040 instructiosn where they describe the tax law for self employment tax on notary income. I think it was SE 3. You could xerox a copy and highlight the area. This is important because the dummies that work in the tax office hardly ever get a chance to see this rule applied in real life. Good luck.
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2853 Posts

Posted - 12/10/2006 :  11:01:40 AM  Show Profile  Visit jbelmont's Homepage  Reply with Quote
Keep good records on this one. Its a tricky one. I had trouble with the IRS on this one but fought and won becuase the law was in my favor.

I am not giving tax advice by what I say here ( disclaimer ). I would contact the IRS and get in writing how they would like it. I was told to use TWO schedule C's. One for travel fees and one for notary fees. How you divide the fees is as follows, $10 per notarization ( in CA ) on signings ( not to exceed the total amount of the signings ). Other states just charge the max that your state allows. The remainder is "travel fee" or whatever you want to call it. You have to count each notarization you did during the year. Do the math and add up all your travel fees. Then the "C" with the travel fee you pay Self Employment tax and the other one you don't. But this is not advice, please ask the IRS so you don't get investigated like I did. I got investigated when I put everything on one C. Document your work extra clearly so the imbiciles at the tax office will not get as confused as they usually do. Certfied mail for all mail to the IRS is safer because they intentionally lose things when they don't want to deal with you.
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3 Posts

Posted - 12/10/2006 :  02:11:32 AM  Show Profile  Reply with Quote
Which taxes do I pay on my Notary fees?

IRS Publication 2004 page 6 says. Re: Notary Public

"Fees you receive for services you perform as a Notary Public are not subject to SE tax."

How do I list my income on my tax return:

If I received a 1099-misc for $800. and I Notarized 85 signatures how do I list my income?

or if I receive a 1099-misc for $700. with 50 signatures how do I list the balance?


How are Medicare and Social Security figured and reported on Notary fees - is any part of Notary income exempt ?

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