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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Rhonda D. Guillory, EA
Learning and Development Manager

 

Rhonda was a Seasonal Tax Return Reviewer at TaxAudit before joining the permanent staff as an Audit Representative in 2009. She has a Bachelor of Science in Computer Science and worked in the Information Technology field for 15 years before making a career change. Since transitioning to the field of income tax in 2003, she has prepared and analyzed hundreds of tax returns. Rhonda enjoys helping taxpayers and tax professionals learn and understand the fascinating world of income taxes. Currently, she is the Learning and Development Manager.


 

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