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PRICE50
Oregon
3 Posts |
 Posted - 09/13/2012 : 8:21:08 PM
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| Yes the Notary fees are included in income on Schedule C of the 1040, but entered on line 24(2011) reducing the AGI, therefore are not subject to taxes. This is only in a state that specifically sets a fee for the notary service; at least that is how my taxes have been filed for years. You are right that the Notary fees are not subject to SE taxes. |
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LindaH
Florida
1754 Posts |
Posted - 09/13/2012 : 6:50:25 PM
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Price, I don't think that's correct - yes your notary fees are exempt from Self-employment tax (the Social Security portion of taxes usually paid by employee and matched by employer)...
However, your entire income is subject to federal income tax (withholding). Notary fees are exempt from self-employment taxes only but are subject to fede3ral taxes.
Linda
http://www.columbiacountynotary.webs.com |
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PRICE50
Oregon
3 Posts |
Posted - 09/13/2012 : 5:31:53 PM
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| Please review the Federal tax code. You can shelter 100% of the fees you receive for the notarial act from withholding taxes. Example. Your state allows $10.00 per notarized signature. You have 2 signers, 1 deed(2 notarized signatures=$20),1 AkA Aff(2 notarized signatures=$20)1 occupancy aff(2x$10=$20),1 signature aff(2x$10=$20) This signing has $80.00 notary fees that are not subject to witholding tax. You charge $20 for printing and $15 for travel. The total for the siging is $115. You deduct $.58 per mile against travel(or whatever the Fed rate is that year) and your remaining overhead costs. You still have self employment taxes due on the profit from print and travel plus Notary income; ie Social Security and Medicare but removing the withholding is huge. When using TurboTax go to "other income", follow the step by step instructions it will ask you about Notary income and properly enter that portion for credit. Your state uses the income from the Fed so you may save on state taxes also. Hope this helps |
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Lee-AR
Arkansas
678 Posts |
Posted - 09/12/2012 : 3:01:00 PM
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You do have to factor your tax obligation into the fees you charge.
Seems like a health plan would be a good way to 'spend on you' while reducing overall income.
If you don't value your time and experience, nobody else will. |
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LindaH
Florida
1754 Posts |
Posted - 09/12/2012 : 03:52:04 AM
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"Also, if a company doesn't pay you more than $600 in a calendar year you technically don't have to claim the money as income unless they send you a 1099. (at least I think that is correct) "
No, not correct...ALL income is reportable, no matter how much a company pays you - which is where good, detailed record keeping is important. The $600 is the company threshhold - a company (or individual) is not required to issue a 1099 unless they've paid an individual entity/person $600 or more for services for the year.
Notary's Life, a thought: would a Flexible Spending Account help you? Those accounts set aside for medical expenses? Not sure as I'm not that familiar with them but it's a thought...are those funds pre-tax? The only problem with them is, if they are pre-tax dollars, you're taxed when you withdraw the funds.
Filing status has an impact on tax burden too. Single, for some reason, pay far more than married; head of household pays less (I believe). How about earned income credit..do you qualify for that?
The only other thing I can think of is review your returns and make double sure you're taking ALL deduction you're entitled to.
Please don't take this the wrong way...I'm not asking so you post this publicly as it's not mine or anyone else's business - just throwing some thoughts out there.
Good Luck. Taxes are a headache..
Linda
http://www.columbiacountynotary.webs.com |
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esnotary
California
125 Posts |
Posted - 09/11/2012 : 10:15:01 PM
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I have a great tax lady that informs me of all the things that I can legally write off. Since I work out of my home I can use some of the electric/phone/water etc, a portion of the square footage that I use as my office, the mileage I put on my vehicles, and of course all of my office supplies. My cell phone, new computer and printers are all part of my business and therefore I use them as exemptions. I would suggest you speak with a tax advisor and do your best utilize the expemptions that you can. Also, if a company doesn't pay you more than $600 in a calendar year you technically don't have to claim the money as income unless they send you a 1099. (at least I think that is correct) best of luck, but I've found that the things I can write off really help with my tax burden!
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notaryslife
California
348 Posts |
Posted - 09/09/2012 : 9:56:32 PM
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This is the fourth and best year for my business but I find I'm greatly penalized for it by 25% taxes. I keep my overhead at a bare minimum so I'm left with heavy taxation that makes it almost better not to make that much money. Not saying it's a lot of money but it's much more than I made the previous three years I started my business.
Does anyone care to share how you limit your tax burden? I don't want a 401K plan. I don't have a health plan yet. I'm thinking this may be the way to throw my money somewhere I can deduct from taxes.
Sincerely yours,
Notary's Life |
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Penalized For Successful Business By Heavy Taxes
