Dan;
In fact, the SE exempt amount is based solely upon the statutory fee (‘public officer compensation’). Expenses do not enter into the calculation. The fees are cumulative and do carry over.
If a NY notary performs 2000 notary acts/year (250 closings at, for ease of example, $100 each), they would report gross sales of $25,000 on their Schedule ‘C’ (Income/loss from a business). Let’s assume that expenses reduce the business income to $15,000. Since a NY notary may charge up to $2.00 statutory fee per act/signature, the notary would indicate $4,000 exempt and $11,000 non-exempt income on their Schedule SE.
If you’re concerned about the accuracy of this information, I’d recommend researching it yourself in the Internal Revenue Code and Treasury Regulations. I’ve provided some citations in the linked thread below.
I’ve been a notary and an IRS Enrolled Agent for quite a few years, and I just want to clarify. I’ve sat for the Tax Bar and am going back to law school.
The only exempt income is the statutory fee, specified in state laws, for the notarial act. This amount may be limited by notarial act, document or session, depending upon jurisdiction. In most jurisdictions, it is an unspecified, ‘not-to-exceed’ amount. The exemption is provided for public officers receiving fees in the conduct of their duties.
The exemption is not for all income tax. Rather, the income is usually included in Schedule ‘C’, where it can be offset by expenses. The exemption only applies to the self-employment tax (Schedule SE), the rest (net of expenses if on is included in income
If a comprehensive fee (covering all activities and expenses), it is incumbent upon the notary to keep a record of how many documents/acts/etc. were performed, and base their exemption on those public officer fees.
A good discussion of this topic, with examples and citations, is made in this Notary Cafe thread (if I don’t say so myself).
I hope this is useful.
Happy holidays, stay healthy and God bless.
HWB.