Tax Deductions for Notary Public Loan Signing Agents to Save Money

Bookkeepers are amazing because they help us understand what we can write off. But I don't think people understand the power of what write offs mean. People don't really understand the power of deduction. So I figured me and you can have a little quick conversation. She's not a tax preparer nor am I. Always hire a tax professional. This was just an example on why bookkeeping so important.

I love the point that you're trying to get across of money back in your pocket because that is so huge and tracking everything. Bookkeeping is money back in your pocket if you're doing it right. I wanted to start. I sent Zoe a little video clip I feel like is really relatable.

I'm thinking of bringing homeware into the store. So that's a write off.

That's a write off?

Yeah.

Do you even know what a write off is?

Yeah, it's when you buy something for your business and the government pays you back for it.

Oh, and who pays for it?

Nobody. You write it off.

Who writes it off?

I don't know. The governor, the write off people. What? Why are we having this conversation?

I'm sure everybody has heard that little scare it before. What is it?

Let's use a couple generic assumptions here. So let's say that you made $10,000 as a notary. Your tax rate is 25%. Frankly, it's irrelevant what your tax rate is for understanding this. But let's just say Your income is $10,000 in notorial income and your tax rate is 25%. And you had zero write offs. There was nothing, no expenses. You deducted. You would then pay $2,500 of taxes to the IRS. This is without any deductions. Now let's talk about deductions. Because the goal of deductions is to lower your taxable income. You are trying to lower the $2500 that you are paying the IRS using the same assumptions. But this time you have deductions. You're keeping track of your expensive like Tara is going to teach you how to do. So if you made $10,000, but now you kept track of all your expenses. So Therefore you had $3,000 of expenses in one year. Your net income is $7,000. Now the IRS is going to tax you 25% on the $7,000. Now you're going to pay seventeen hundred and fifty dollars. So by deducting your expenses, you're going to now save 6, $750 in real money. That is money back into your business. This is what write Offs mean, and so a write off is meaning you can deduct it from your taxable income. So therefore the IRS cannot tax you on the money that you spent. Things that help move your business forward. By the way, she's going to cover your airfare. Conference is tax deductible. Your ticket is tax deductible. Your hotel room is tax deductible. Food you eat. She's going to cover all of this. Did I explain that?

Okay, T. That was perfect. Mark, Bookkeeping is tracking your invoices, where you're getting your money from, all of your income. And then your expenses, what you spent on conference, what you spend on that printer, your airfare, those are expenses for your business. Keeping track of those, subtracting them from your income, you get your net profit. That is like a very simple version of it. And it helps you know how much, you know, you're making off of your business. Is it beneficial for you, for instance.

For you guys going to conference, you can write off educational expense. She's going to go into that in bigger detail. And so the, the cost of the conference isn't fifteen hundred dollars. It's fifteen hundred dollars minus the deduction that you get off of your taxes.

I was going to say a good word is allocating. In the top example, you see $2,500 is being spent. Spent. That's going to the government. That's out of your pocket. In the bottom example, you see 1750 is spent just to the government. You're saving 750 like Mark mentioned. Is it going to help your business? Taxes don't necessarily help your business. It's just you have to pay them.

That's right.

But are you gonna use that money to help your business? Money back in your pocket, Are you gonna give it away?

We have a conference coming up, the loan signing system. National conference.

Yeah.

So I'm getting a lot of people. Well, Mark, that's a thousand dollars if you add the flight in the room and the ticket. I'm like, well, you're not understanding, like you're going to spend the thousand dollars somewhere else, but you can write this off. Understanding how your deductions work is really why you should pay attention to this training.

On the IRS website, there are lists and lists and lists that you can find of tax write offs. We're just going to go over a general list that we think would be beneficial for you guys. You wrote printer paper. Absolutely. The accountant fees from previous tax prep. Absolutely. Those are legal and professional fees that you need for your business. Another One that I know is going to be hu is auto expense. So you guys are driving to a lot of your clients. So there's going to be two ways of tracking your auto expense. You can track it with mileage, which there's a lot of different mileage apps. And then at the end of the year, your tax preparer will add up all your mileage and get your percentage. The other option is tracking all of your auto expenses. So anytime you go to the gas station, anytime you get a tire, a tire rotation or an oil change, or new windshield wipers, that can go into auto expense. And then again, your tax preparer will take a percentage. And that's something you guys will talk about. Your home, office, rent and all of that kind of stuff. Internet, electricity, water. Yep, all of those. Your mortgage, rent, your homeowner's insurance, even. So all of those. Your tax preparer at the end of the year should give you a form, and they should have all of those things listed out, and you should be able to fill in. They're going to have a percentage ready for you, and once you fill in how much you spent, they're going to be able to write that off. So it's not going to be 100%. You can't write off 100% of your home because you obviously live there. What you want to keep track of is, or keep handy are your bank statements, your receipts, any invoices that you create, anything that you're sending out, you want to keep those. And then just making sure that you have a paper copy of those and storing them. We'll get into that. But storing them either paper copies or on the cloud, a digital copy, either way is fine. Just making sure that you're doing one of them. Bank statements alone are not going to be sufficient enough if they audit you. So a good rule of thumb is keeping everything, especially your receipts, for seven years. And by that, we can take a picture of them and save them to the cloud or some sort of database. Or you can keep a copy in a Ziploc bag, a shoebox, and stick it in the back of your closet as long as you have it somewhere handy. That's what's important.

We need to remind people why it's important to listen to you. And I don't think people realize why it's important to listen to you or even hire someone with your expertise.

It's like boring conversation. It can be. And when you put, like, this much emphasis on how important it is, it becomes exciting, because that's right, money back in your pocket.

That's exactly right. You have to stop being unaware of your expenses so you can literally get money back into your pocket by not paying income tax on the expenses that you're paying out. Because you're going to spend that money in taxes. As a business owner, even if you're making as low as $10,000, it's still going to be a couple thousand bucks in taxes. Or you can have deductions to where it lowers your taxable income. Now you know what a write off means. A write off means you lower your taxable income. You lower your taxable income. That's real money. You're not paying the irs. But it's important to understand that educational expenses, printer expenses, business expenses lowers your taxable income. That's why this training today is so important.