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Notary and QBI deduction

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Level 1

Hello,

Has there been any concrete guidance published on whether notary income is considered a "a business" for purposes of the QBI deduction.  (As public service work is not considered "a business" subject to SE tax).  

 

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6 Replies 6
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Level 10

No, you can still ask three tax preparers and get four different answers.  The people who write the Regulations have bigger questions to ponder, even when California notaries can collect $15 per stamp.

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Level 10

Unicorns might exist, but I've never seen one.  Certainly nothing that rises to the level of a trade or business.  Are you saying you have a client with a thriving notary business that pays the mortgage and puts food on the table?

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Level 1

They own a bunch of UPS stores and have well over $150k of notary income.  

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Level 10

Can you explain how the money flows?

If I walk into a UPS store and pay the store $10 to have a document notarized, I'm pretty sure that's just regular income to the store.  If, instead, I pay the individual at the desk (who is also a notary) $10 personally for notary services, then that particular individual may fall under the SE exception as a fee-based official (but they need to keep detailed records segregating notary income from other income).  Unless your client with "a bunch of UPS stores" is the one doing the notarizing, I think it's just going to be trade or business income.

Just my $0.02 worth.

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Level 1

The employees do the notary services.  The services are rung up as notary service income.  There is POS for all UPS stores so the income goes to a separate GL account, but as a bulk journal for the day.

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