What taxes do I have to pay on my notary income?

July 01, 2015 by Dave Du Val, EA
1040 Pie Chart

Hey Dave,

To increase the business offerings at my mailbox rental business, I became a Notary Public this year. So far I made about $1,000 from my notary service. Should I include the notary fees on my tax return as income received by the mailbox rental income?

Jackson

 

Jackson,

Notary fees are treated a bit differently than other sole proprietor business income in that they are not subject to self-employment taxes. Because of this difference − and to make it easier − you might want to consider creating a separate Schedule C (Profit or Loss from Income) just for your notary business, indicating in your tax program that the income is not subject to self-employment taxes.

And if you do decide to include the notary fees on your mailbox business income schedule, be sure to adjust your self-employment tax schedule for the notary fee amounts. Most tax programs provide an easy way to make these self-employment tax adjustments. There are just a few positions for which a taxpayer would not be required to pay self-employment taxes on self-employment income, and this is one of those unusual situations.

Best of luck in your new business endeavor!

Deductibly Yours,

Dave

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David E. Du Val, EA
Chief Compliance Officer for TRI Holdco

 

Dave Du Val, EA, is Chief Compliance Officer for TRI Holdco. Inc., the parent company of TaxAudit, and Centenal Tax Group. A nationally recognized speaker and educator, Dave is well known for his high energy and dynamic presentation style. He is a frequent and popular guest speaker for the California Society of Tax Consultants, the California Society of Enrolled Agents and the National Association of Tax Professionals. Dave frequently contributes tax tips and information to news publications, including US News and World Report, USA Today, and CPA Practice Advisor. Dave is an Enrolled Agent who has prepared thousands of returns during his career and has trained and mentored hundreds of tax professionals. He is a member of the National Association of Tax Professionals, the National Association of Enrolled Agents and the California Society of Enrolled Agents. Dave also holds a Master of Arts in Education and has been educating people since 1972. 


 

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