Notary Public / Court Reporter

Hi June,

Let me preface by saying, this year I attempted to do my own taxes through TurboTax to have a greater and deeper understanding of same; I believe that's the only reason that this was brought to my attention. I truly don't believe this question has ever been asked of me recently by any accountant that I've used.

There was a question regarding being a notary public and that any services as such were being performed as a public official and, therefore, those services were tax exempt.

As a court reporter it is my responsibility to swear in all witnesses and to then also certify every page of the transcript as being true and correct (also why I need to be a notary) as far as what was said, the parties present, events that happened, et cetera.

I feel that being a notary is an integral part of my job and, therefore, I am not sure if I should have to pay any self-employment tax. I have thought and thought about it and I don't see how you can separate out the two and I do believe my client pays me for both services being performed at the same time. If I were to lose my ability to be a Notary I would no longer be able to report. I looked on my previous tax years and I have always paid this self-employment tax.

Any guidance and standing I would have on this matter would be greatly appreciated. Thanks so much, in advance, for all of your time.

Sincerely, April in North Carolina



Hello April,

Public officials and public officers do not have to pay self-employment [SE] tax. There is no precise definition of "public official." The IRS says it is anyone who who administers or enforces public laws and exercises significant authority. . This includes positions such as governor, mayor, member of the state legislature or school board, justice of the peace, tax assessors.

A notary public, although she must pay income tax on fees earned, does not have to pay SE tax on income.

The IRS, on its website, gives the following examples of independent contractors: "People such as lawyers, contractors, subcontractors, public stenographers, and auctioneers who follow an independent trade, business, or profession in which they offer their services to the public, are generally not employees ... The earnings of a person who is working as an independent contractor are subject to Self-Employment (SE) tax."

A court reporter or stenographer who offers her services to attorneys or anyone else needing her services is considered self-employed, that's an independent contractor, and so does not get the exemption from SE tax that public officials get. A court reporter is not considered a public employee.

Here's a decision from a court case [Allen C. Moore and Annette Moore, plaintiffs v. U.S. defendant] in California in 1984: SE tax must be paid by court reporters who were also notary publics. The court reporter's services generated business fees subject to SE tax despite the practical necessity of being notary." Being "notary was merely incident to court reporting business."

I'm sure that's not the answer you want but it was a great question.

And, I'm glad you learned something from TurboTax, but, be careful. If you've read some of my other writing you know that many tax prep programs do not do the best job for indies.

Best,

June