As tax time rolls around, you might be wondering how you’re supposed to calculate taxes on your mobile notary public business, what you need to report, and what you can deduct. Of course you should always consult a tax professional for advice about your specific situation. Without presuming to offer tax advice, here is some information that might help save you time answering some common questions.
Q: Do I have to report my mobile notary income?
A: Yes. According to IRS Publication 17, notary fees should be reported in your gross income on Schedule C or Schedule C-EZ. You should report all income you receive as a notary, including notarial fees, clerical fees, and travel fees. This applies even if your notary income is very small.
Q: Do I have to pay self-employment tax?
A: The short answer for mobile notaries is yes, if you earn over $400 from services above basic notarial services. Here are some details:
Because a notary is a public official, you do not have to pay self-employment tax on income which is specifically from notarial services. If notary fees were your only form of self-employment income, you could elect to write the words “Exempt-Notary” on Form 1040, line 58. (Note that claiming this exemption can affect the amount of Social Security payments and disability you are eligible to receive, so you should consider this when weighing your options.)
However, beyond this exemption for notarial services, there are some additional considerations you must take into account if you do notary work as part of a broader self-employment business or as a mobile notary.
If you are self-employed in a business that offers notarial services in addition to other goods or services, and if your business makes over $400 a year after subtracting the fees from your notary work, you should file a Form 1040 Schedule SE and report the portion of your self-employment income that is subject to self-employment tax.
Likewise, since a mobile notary chares for additional services above basic notarial services, if you earned over $400 from these services after subtracting fees from your notary work, you should file a Schedule SE to report self-employment tax. You would then pay self-employment tax on the portion of your income from these additional services, but not on the portion of your income from basic notarial services.
Q: What can I deduct?
A: You can deduct certain expenses that were paid for by you and not by an employer. Expenses you may be able to deduct include:
- Educational expenses for your notary training, such as seminar tuition
- Your annual bond cost, which may be deducted on Schedule C or Schedule C-EZ
- Errors and Omissions (E&O) insurance
- Home office deduction, if applicable
- Notary supply costs
- Notary association membership fees
- Costs for travel to customers’ homes or businesses (in states which permit this; Nevada does not)
Q: Is there any mobile notary software I can use to help make filing my taxes easier?
A: NotaryCRM mobile notary software is designed to make filing your taxes easier by helping you track your notary income and certain items that may figure into your deductions and overall calculations, such as signature count, page count, and mileage.
Q: Do companies I work for have to report anything?
A: If you receive more than $600 per year from any one company, that company will prepare a Form 1099MISC.
Again, this is general information, not advice for how you should handle your particular situation. If you have questions about how to file your taxes, be sure to consult a tax professional or the IRS. And be sure to take advantage of NotaryCRM’s automated financial tracking features to help you calculate your income and deductions and save you stress at tax time.