Tracking and Reporting Notary Fees (Taxes)

Tis’ the Season -- Tracking and Reporting Notary Income
Copyright American Society of Notaries | Published February 15, 2023

The new year is already flying by… and soon we all will be busy gathering our records, receipts and tutorials on filing our annual income tax return.

Notaries Public who notarize regularly as sole proprietors, as well as employee Notaries who notarize outside of work for extra income, are responsible for reporting those earnings to the IRS.  The IRS considers you to be self-employed if you:

• Carry on a trade or business as a sole proprietor;
• Are an independent contractor;
• Are a member of a partnership; or
• Are in business for yourself in any other way.

According to the IRS, “Self-employment can include work in addition to your regular full-time business activities, such as certain part-time work you do at home or in addition to your regular job.”  

Income from notary fees is not subject to self-employment tax, but it still must be reported to the IRS on Schedule C (Form 1040); see “Income and Losses Not Included in Net Earnings From Self-Employment” on page SE-5 of the IRS’ 2023 Instructions for Schedule SE.

The IRS also offers a helpful “tax prep checklist” for anyone responsible for filing a tax return, no matter their tax status (source, IRS Publication 5349, “Year-Round Tax Planning Is For Everyone” (Rev. 10-2022):

• Social Security numbers for you, your spouse and dependents or an Individual Taxpayer Identification Number if you, your spouse or your dependents do not have a Social Security number.
• Birth dates for you, your spouse and dependents on the tax return.
• Wage and earning statements (Form W-2, W-2G, 1099-R,1099-Misc) from all employers, issuing agencies or payers , including Form 1099-G, Certain Government Payments, for any taxable unemployment compensation.
  
• Forms 1099 for interest and dividend statements from banks and other payers.
• A copy of last year’s federal and state returns.
• Bank account routing and account numbers for direct deposit.
• Total paid for daycare or dependent care expenses and the provider’s tax number, such as their Social Security number or business Employer Identification Number.
• Form 1095-A, Health Insurance Marketplace Statement.
• IRS correspondence including notices, letters and forms related to adjustments, payments and your current IP PIN.

On a related matter, do you, at any time during the year, charge a per-mile travel fee for driving to meet a customer who has requested your Notary services?  If you do, you should periodically monitor IRS’ current standard mileage rates for business use purposes.  

Be aware that any mileage fee you charge might be addressed in your state’s Notary law or administrative rules.  Be sure to consult both your state laws and rules and the IRS’ applicable standard mileage rates, to ensure any per-mileage fees that you charge are in compliance.  (See IRS’ announcement of the standard mileage rates for 2023, here.)

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It’s Tax Season – Report Notary Fees and Income Appropriately
Copyright, American Society of Notaries  |  Updated September, 2024

Please note:  this article is not intended to replace expert tax advice. American Society of Notaries urges all notaries who earn income from their notary services to consult a tax advisor for assistance with income reporting and tax obligations.  In addition, the Internal Revenue Service’s website offers extensive information on income reporting requirements.  For information on reporting of notary fees earned in 2023, see IRS Publication 525 (2023), Taxable and Nontaxable Income, available here.

It’s tax season, and time for the American Society of Notaries’ annual reminder about reporting of income derived from notary services.

Report all notary-related income.  All income earned from providing notary services, including notarial fees, travel fees and any other incidental fees, is subject to reporting to the Internal Revenue Service on Schedule C (Form 1040).*
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*Form 1040EZ is no longer in use.  The IRS advises that filers who used 1040EZ should now use Form 1040 or Form1040-SR, as applicable.

Self-employment tax does not apply to fees charged for actual notarizations. Part of the income earned by a notary entrepreneur—specifically, the amount charged for performing a notarial act such as an acknowledgement, verification or verbal oath/affirmation—is exempt from self-employment tax.  

This tax ensures that self-employed individuals still contribute to both Social Security and Medicare.  The IRS’ definition of a “self-employed” person is broad, and would generally include a person who is regularly employed but has a notary business on the side, or a person who works for themselves by operating a notary business full-time.

• For example:  a notary has a notarial services business that earned $9,000 last year.  Two thousand of that was attributable to fees charged for specific notarial acts (acknowledgments, verifications, oaths/affirmations, etc.). The $2,000 would be exempt from self-employment tax, but the remaining $7,000 would not.  The entire $9,000 is reportable as income.

If your net self-employed earnings are less than $400, then you are not required to pay self-employment tax.  Consult the IRS’ instructions provided with Form 1040 (Page 45, Worksheet B).

Questions, comments?  Email support@asnnotary.org

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