The most successful loan signing agents and notaries public build their reputation through consistency. Notaries and loan signing agents translate their skills into tax season by remaining error-free, organized, prepared, and understanding deductions!
Organization is Key
Whether you provide occasional notarial services to a friend, perform notarial tasks in your current position, or provide mobile notary services, keeping detailed invoices, receipts, bank statements, and 1099 forms is critical to staying organized.
Although notary fees cannot exceed the maximum costs specified per state, mileage and travel expenses fees are considered gross income or the amount of money received before anything is deducted. Be aware of and track your mileage, purchases, and expenditures for a smooth tax filing process. The IRS only accepts consistent documentation of mileage and other expenses. If staying organized is an area of improvement for you, investing in a logbook or keeping digital records can help rectify this issue.
Reporting Fees
All fees explicitly received for notarial acts are gross income on a Schedule C or Schedule C-EZ (Form 1040). Notarization fees are not subject to self-employment tax. Still, we advise speaking directly with a qualified tax professional or the IRS if you have questions or unique factors that impact how you report your income.
Deductions
Do you know that many of your expenses as a notary are deductible? Notaries’ biggest mistake in tax season is missing out on deductions. Always ask your tax advisor questions, and do not hesitate to inquire about a deduction! Almost anything you purchase out of pocket to complete your job can be considered a deduction! So yes, that new printer in your trunk for last-minute signing documents is a tax deduction!
Communication expenses such as landline and mobile phone services, even internet and postage fees are deductible. Notaries can also deduct the cost of their yearly bond on a Schedule C. The IRS permits deductions for all legitimate expenses!
Travel to customers’ homes and businesses, accounting software, a home office, notary supplies, training, Notary Association membership fees, mobile phone and internet expenses as well as Bond insurance and Errors and Omission insurance are all common deductible expenses!
You should consult with your tax professional as to whether it is best for you to pay the self-employment tax on your notary fees, rather than taking the exemption. These are important questions to consider, as it may affect your Social Security benefits at retirement age.
The deadline for the 2022 tax year is Monday April 18th, 2023.
Want to Know More?
If you are a Notary Public or Professional Signing Agent looking to make the most out of your tax season, review the webinar that we held last year for information that is still applicable for 2023! You can find the webinar here for insider expert knowledge from respected Notaries and Accountants in the industry!
Additional Resources: IRS Publication 17, Notary Assist, National Notary Association