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Hotline Tip: Are Notary Fees Tax-Exempt?

NNA Hotline Tips For NotariesAccording to the instructor of my Notary training course, the Notary fees I collect for notarizing jurats and acknowledgments are tax-exempt, but my tax preparer says he could find no such exemption. Who is correct?

When it comes to filing your taxes, Notaries must report Notary fees as ordinary income. What your instructor was likely referring to is the fact that Notary fees are not subject to Self-Employment Tax usually declared on IRS Form SE. You can find more information on this topic in Chapter 12 of theIRS Publication 17 (listed as “Notary Public” beneath the “Other Income” category.)

For more information on this topic, you might also want to check out the NNA’s recent Bulletin article, “Tax Tips for the Self-Employed Notary.”

 

Confronted with a tricky notarization? Unsure how to proceed? NNA members have unlimited access to our expertly trained NNA Hotline counselors to help you with all of your notarial questions. Call (888) 876-0827Monday through Friday, 5 a.m. to 7 p.m. PST; Saturday, 5 a.m. to 5 p.m. PST

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Kerri Marvel

15 Apr 2015

The information supplied by the NNA above is what gives us proof that the fees collected for notarizations are indeed exempt from Self-Employment tax on your Schedule C, but I found that it was difficult to find HOW to actually take the exemption on my tax return. I did my homework, and want to share this information for those of you who do your own taxes (like I do). Here is what to enter on your taxes: Multiply the number of paid notarizations you completed by $10 to get the amount that is exempt (they are exempt from self-employment taxes only), and then enter it on the Schedule SE (Self Employment Tax form) to the right of the dotted line on Line 3 like this: ".....EXEMPT NOTARY.......(your amount)...." Your tax software will minus out that amount from the preceding Line 2, thereby decreasing your taxable business income by this amount, and allowing you to pay less in self-employment taxes. In Turbo Tax, which is what I use, the software won't know to ASK you for this, so you will need to OPEN the forms side of your tax return, then open the Schedule SE, and type it in as above. Actually, the way I did it was to first open the Schedule SE Adjustment Worksheet (SE Adj Wks as it will appear in the list of forms that you can open, and this will probably only show up, after you have started to enter amounts for your business' Schedule C). Once you have the worksheet open, go to Line 9 (on this worksheet) - it's called Exempt Notary Public Income for Schedule SE Line 3. Entering your amount on the worksheet will automatically put it on the Schedule SE for you. (if you just cannot figure out how to open the forms side of your return, it's possible that you need to upgrade your tax software, I found that out the hard way one year).

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