Reporting taxes

IRC §61(a) defines gross income as “all income from whatever source derived”, unless specifically exempted or excluded.

Put simply: All income from signings, less expenses, are considered ‘taxable income’.

The frequent confusion is over self employment taxes.

Official notary fees (i.e.: the allowable charge per page/notary act, times the amount permitted by state law) are exempt for the purposes of self-employment taxes.

So, while total fees minus expenses are included in income (reported on Schedule C), self-employment tax is calculated on a lower amount (total fees minus - offical notary fees minus expenses), reported on Schedule SE.

Please also look at this NotaryCafe Forum conversation thread for a detailed discussion.

HWB.

1 Like