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Tax question

Old 02-06-06, 03:12 PM
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Tax question

So as part time work to make some extra money I started doing notary work last year. I made about $6000 and got a 1099 from the company I was doing it for (not as an employee but as a contractor of sorts) The problem is that I can't figure out how to file it.

I use tax cut and it's making me go through steps like I run a business. I have to enter miles traveled and gas used which I did sort of keep track of. The problem is that at one point it asked me if any of that income was for notary fees and I put down that it all was so now it's not charging me any tax on it. This doesn't seem right to me. I'll probably end up just going and getting our taxes done but I'd like to know if I should be paying taxes on this money. Any help?
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Old 02-06-06, 03:16 PM
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You do run a business.

If your expenses exceeded your income from the business you won't owe any tax on that income.
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Old 02-06-06, 04:06 PM
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The problem is that at one point it asked me if any of that income was for notary fees and I put down that it all was so now it's not charging me any tax on it.
You answered the question wrong. I don't believe you paid $6000 in notary fees, did you?
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Old 02-06-06, 04:15 PM
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Originally Posted by The Bus
You answered the question wrong. I don't believe you paid $6000 in notary fees, did you?

No, I got paid $6000 in notary fees. I do mobile notary work.
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Old 02-06-06, 05:00 PM
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Originally Posted by Timber
No, I got paid $6000 in notary fees. I do mobile notary work.
You filled out Turbo Tax wrong. The question they asked was if you PAID notary fees. Your $6000 is income. Try it again and see if it works. There's a small possibility that you may need to "upgrade" your TurboTax to be able to handle self-employment income.

I don't think it necessary to hire an accountant, as I would think at most you might pay $200 extra in taxes if you don't take advantage of the write-offs. If you plan on continuing notarial work and if doing taxes is a hassle, certainly consider it.

Do NOT go to any H&R Block, Freedom Tax Service, etc. etc. You need a real accountant with an established practice. H&R and the rest are just a waste of money. (IMHO)
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Old 02-06-06, 05:17 PM
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Originally Posted by The Bus
You filled out Turbo Tax wrong. The question they asked was if you PAID notary fees. Your $6000 is income. Try it again and see if it works. There's a small possibility that you may need to "upgrade" your TurboTax to be able to handle self-employment income.

I don't think it necessary to hire an accountant, as I would think at most you might pay $200 extra in taxes if you don't take advantage of the write-offs. If you plan on continuing notarial work and if doing taxes is a hassle, certainly consider it.

Do NOT go to any H&R Block, Freedom Tax Service, etc. etc. You need a real accountant with an established practice. H&R and the rest are just a waste of money. (IMHO)

AHH, makes sense. I didn't actually do it, my wife did so I'm not sure of the actual wording. I'll go back and do it myslef to see if it turns out any different. The wife actually was planning on taking us to H&R Block or some similar service, I tell her we should just try to run through it again on our own.
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Old 02-06-06, 06:12 PM
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Yup, I agree with The Bus. My wife did the Body Shop Consultant thing this year and got a 1099 for that. This was the first time that either of us had self employment income. I used TurboTax Premier and it was worth every cent for that upgrade, plus you can write off the cost of the tax preparation software so that's a bonus too. If you haven't upgraded yet, you may want to consider it. The software should ask you all of the deduction questions and I'm not sure the basic TurboTax did that, obviously TaxCut will be a little different. On a couple hundred bucks of actual income, my wife and I actually ended up claiming negative business income after figuring in vehicle expense, use of a home office, and start up costs. It was much easier than I expected and was not at all worth having a preparer do it for me.
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Old 02-06-06, 07:15 PM
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On a side note...

How did you make 6k doing notary work? Here in Illinois you can only charge a dollar to notarize something unless they are immigration documents. Just wondering cause I wouldn't doing some side work like that.
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Old 02-06-06, 08:53 PM
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Originally Posted by tbone
How did you make 6k doing notary work? Here in Illinois you can only charge a dollar to notarize something unless they are immigration documents. Just wondering cause I wouldn't doing some side work like that.
What I actually do is go out to people's houses who are refinancing. I have them sign all of the paperwork and then notorize it. I'm going to have to get licensed to do it at some point soon but up until now it hasn't been a problem. So while in MD you can only charge $5(?) for notarizing I'm actually providing another service as well so I can charge more.
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