Notaries must report Notary fees as ordinary income, but Notary fees are not subject to Self-Employment Tax and are usually declared on IRS Form SE.
You can find more information on this topic in Chapter 12 of the IRS Publication 17 (listed as “Notary Public” beneath the “Other Income” category.)
Report payments for these services on Schedule C or Schedule C-EZ (Form 1040). These payments aren’t subject to self-employment tax.
From Instructions Schedule SE (Form 1040): Fees received for services performed as a notary public. If you had no
other income subject to SE tax, enter
“Exempt—Notary” on Form 1040,
line 57. Don’t file Schedule SE (see "My Workaround", below). However, if you had other earnings of $400 or
more subject to SE tax, enter “Exempt—Notary” and the amount of your
net profit as a notary public from Schedule C or Schedule C-EZ on the dotted
line to the left of Schedule SE, line 3.
Subtract that amount from the total of
lines 1a, 1b, and 2, and enter the result
on line 3.
(Since these are manual entries, you should use a desktop (CD/Download) of TurboTax. This will give you the ability to make direct entries to the tax form. Depending on your particular situation (other SE income?), you may have to print and file by mail, after making necessary adjustments and corrections. As far as "net losses", you could still report your expenses on a Schedule C).
"My Workaround", probably good for any of the above situations:
Report your non-Notary fee income, if any, and ALL expenses on a Schedule C.
Enter your Notary Fee income as follows:
- Go
to Less Common Income, Miscellaneous Income and Other reportable income
(enter "other reportable income" in the Search Box and Select
"Jump to other reportable income")
- Continue
to the screen "Other Taxable Income". Enter the description
as "Notary Fee Income" and the amount. These are NOT wages.
