Notary signing agent

[oceanlovin'ea]

I was looking for something in TTB and found on page 3-19 that notaries do not have to pay SE tax on their earnings.
That is news to me!

I have a couple that are notary signing agents. That means that their net income is not subject to SE tax. Is that correct?
Are there any exceptions or limitations?

Linda F

[gkaiseril]

Only the fees charged for the "Notary" service are not subject to SE tax, all other income from self employment would be taxed.

IRS Pub 525 Taxable and Nontaxable Income

http://www.irs.gov/pub/irs-pdf/p525.pdf#page=30

Instructions form 1040 Schedule SE age SE-3

http://www.irs.gov/pub/irs-pdf/i1040sse.pdf#page=3

[Koss]

Notaries

If you are curious, and want to know the technical reason why the fees for performing notary services are not subject to self-employment tax, it goes something like this...

A notary public is technically a public official who is "appointed" or "commissioned."

For example, in Ohio, a notary public receives a commission from a judge of the Court of Common Pleas. In other states, notaries may be appointed by the governor.

Soooo...

The income that arises from the performance of the official duties of a notary public is treated the same way as...

compensation for jury duty and service as an election judge

In other words, it goes on line 21.

Burton

[oceanlovin'ea]

Thanks

Burton for the explanation.

The signing agents are paid for each signature that they notorize. But they can deduct their mileage to the places they have to go. Not a bad deal.

I might decide to do that off season.

Linda

[Bees Knees]

The signing agents are paid for each signature that they notorize. But they can deduct their mileage to the places they have to go. Not a bad deal.

I might decide to do that off season.

Circular 230:

§ 10.26 Notaries.
A practitioner may not take acknowledgments, administer oaths, certify papers, or perform any official act as a notary public with respect to any matter administered by the Internal Revenue Service and for which he or she is employed as counsel, attorney,
or agent, or in which he or she may be in any way interested.

[oceanlovin'ea]

Not connected

If I were a signing agent for mortgage financing, I wouldn't be notorizing anything that was connnected to my tax business. At least I don't think I would. I don't see a connection between the two.

Linda F

[Koss]

Notaries Public

No, there isn't a typo in the title of my post. That is technically the correct plural form.

Kind of like when the IRS e-file manual says that you can't electronically file a return that includes more than four Schedules C. See, when the adjective comes after the noun... okay, never mind LMAO

I agree, Linda, that almost anything you would be asked to notarize would probably be unrelated to your tax practice, unless you are actually a tax attorney or something.

The real function of a notary, I think, is probably one of the most misunderstood concepts around.

It is certainly true that most of the time, notaries are performing only the very simple act of verifying, in their capacity as a public official, that a signature actually belongs to the person whose name appears below it.

Many states only allow notaries to charge $2 or $5 for each signature that they notarize. The rules and regs vary by state, as well as just how strict the state is about enforcing them, and how well applicants are screened. The potential for fraud and abuse is incredible. In some states and for some transactions, it has reached the point where notarization just doesn't mean anything anymore. When interstate commerce is involved, or large dollar amounts of money involving real estate, some institutions have begun to require a bank signature guarantee.

But when it's done right, notarization still serves its purpose. What many people do not understand is that it's not just about signatures. A notary has the authority to administer an oath. That function can only be performed by a few other public officials. Depending on what state you're in, it may or may not include people like deputy sheriffs. It usually includes bailiffs, court clerks, magistrates, and of course, judges. Okay, here's a good one: if you can't find a notary, and you need to have someone administer an oath, it can probably be done by the county coroner. In some states, any lawyer can administer an oath if he is properly acting in his capacity as "an officer of the court."

Years ago I was a notary in Illinois. I haven't gotten around to getting "commissioned" here in Ohio. But if you really think that all a notary does is look at your ID and put a rubber stamp next to your signature, here's something to think about...

When a newly elected public official takes office, there is a certain honor that comes with the identity of the person who "swears them in," or administers "the oath of office." Who swears you in depends on who you are. The newly elected mayor of a small town might be sworn in by a local judge, or if he's not available for some reason, the county coroner.

The newly elected mayor of Toledo, Ohio, might bask in the glory of being sworn in by a judge of the appeals court.

Many US presidents have been sworn in by justices of the US Supreme Court.

But when JFK was assassinated, LBJ was sworn in on board an airplane.

By a notary public.

Burton

________________________________________
The map is not the territory...
and the instruction book is not the process.

[travis bickle]

i suppose

.

But when JFK was assassinated, LBJ was sworn in on board an airplane.

By a notary public.

Burton

she might well have also had a notarial capacity, but sarah hughes is best remembered as a judge . . . http://en.wikipedia.org/wiki/Sarah_T._Hughes

[Bees Knees]

Well, it may be true that you as a notary will have work not related to your tax practice. But what are you going to do when your tax clients find out you are a notary, and something related to their tax return needs to be notarized?

“You will notarize a document from a stranger who walks in off the street, but you can’t notarize this for me when I’ve been your client for the last 15 years?”

[oceanlovin'ea]

I have notarized school permission slips for my neighbor who is also my client and my friend. I have notarized sale of property papers for someone, well she wasn't actually my client....her deceased son was. The property sale document wasn't tax related.

I don't think anyone has asked me to sign something tax related. Can't notarize for my family. That is nice.

Just a thought about the signing agent. Since I am already a notary, could just be an extension. But then by the time tax season is over, I might just be too tired to do anything else.

Linda F

[thomtax]

The real function of a notary, I think, is probably one of the most misunderstood concepts around.

Judging from the comments, it appears that many do not understand that the rights, duties and abilities vary drastically from state to state. Each state has it's own rules. I met an EA from Louisiana that was a notary. In her area of the state, her particular notary rights allowed her to actually do much of the work of an attorney. In other states, doing what she does would get you prosecuted.

So, before anyone jumps, be sure to check out your local regulations.

LT

[Zee]

Some natories can perform marriages

I believe Florida notaries can also perform marriages. That might help in tax practices, no? Have clients, say "I do" on 12/31/.