Tax Tips for Your Notary Business: The Notary Beginners Guide
Starting your own notary business is an exciting time! It's also very scary, and taxes can seem like one of the most daunting parts of this process. However, taxes are an unavoidable reality for small businesses. You may be tempted to put off preparing your taxes until the last minute, but it's important to file your taxes before April 15th to avoid penalties. Preparing your taxes can be overwhelming, but here are some tax tips for you to help you get started with your filing.
When you file your taxes, you'll have to submit an employee's W-2 form if they had wages of more than $600 for the year. If they did not have wages of more than $600, but had income from 1099-MISC forms, you will also need to submit a 1099-MISC form. Signing companies will provide notaries with a 1099-forms
Notaries will first need to calculate what notary income is for the year. Income is calculated based on the difference between the total amount received and the total expenses incurred during a tax period.
Generally, Notaries want to calculate your gross income (also called gross receipts), which is the total amount of money you received from business activities before any deductions. But there are different ways of calculating your gross income depending on how you do business. For example, if you operate as a sole proprietor or LLC, your gross income will be written as your net income because taxes have already been taken out. However, for a partnership or corporation, that would be considered taxable income and taxes will need to be paid before it can be included in your gross receipts.
Once you know what your gross revenue was for the year, you'll need to deduct things like deductible business expenses from that number to get to your net profit or loss. This includes items such as office supplies, rent, utilities, payroll taxes, health insurance premiums, and other misc fees associated with running a business.
In addition to those above-mentioned costs, all types of depreciation will also need to be subtracted from the total amount of revenue—this includes expenses related to equipment and software that.
When you file your taxes, you will have to decide if you want to take deductions or exemptions.
Exemptions are less desirable because they reduce your taxable income by the number of exemptions you claim on the form. Deductions are tax breaks that reduce your adjusted gross income by the amount of money you can deduct on the form. Tax deductions vary depending on what type of business you operate. If this is your first year as a small business owner, there are some tax deductions that may be available to you.
Between starting your notary business and running it, you're likely to have tons of questions about what taxes need to be paid, how much you should pay for them, and more.
Luckily, the IRS has great resources on their website that can help you get a handle on what needs to be done.
The IRS website is a valuable resource for any small business owner because it provides information on tax law updates and changes. You'll also find helpful forms and instructions that will walk you through the process. Just visit the Tax Help Topic Index on IRS.gov to learn more.
Fees for services you provide as a notary public are not subject to self-employment tax.
Do notarial fees have to be taxed?
notary fees are reportable as income, but notary fees are free from self-employment taxes