1099 CPE Courses For CPAs
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As a tax practitioner, you’re most probably aware of how much the IRS likes 1099 forms.
These are the forms that let taxpayers accurately report their income generated from sources other than salary or job wages. When someone receives a 1099 form, he/she mustn’t ignore it because the IRS gets a copy of the same too.
And this is the reason why pursuing 1099 CPE makes you a valuable asset to your clients. Let’s see how 1099 CPE courses help you stand out from the competition by improving your knowledge as a tax practitioner.
By taking 1099 CPE courses, you’ll learn about many essential things about 1099 forms. For instance, the difference between a W-2 form and a 1099 form. Though both of these are information returns, a W-2 form is what an employer sends to its employees mentioning their individual salary, wage, and withholding tax information. On the contrary, a 1099 form documents different kinds of non-employment income such as interests, capital gains, dividends, etc. Online 1099 CPE courses will also help you understand that taxpayers must compare the income mentioned on their form 1099 to their own records because occasionally, these forms may come with errors. This is crucial because the IRS matches a person’s 1099s with his/her tax return and if the tax return doesn’t contain any income documented on 1099, the agency will send a notice to him/her stating that he/she owes taxes on the unreported income.
There’re different types of 1099 forms and each of them is used to report certain types of income. However, most taxpayers only receive a few of them. Here’s an overview of the most commonly used ones. You’ll be able to learn about these and more by pursuing 1099 CPE courses.
This form is utilized to report a taxpayer’s interest income received from brokerages, banks, or other financial institutions. If the interest goes over $10, the taxpayer will receive this form.
If a taxpayer received rent, royalties, prizes, awards, or any other kind of income that’s not covered by any other 1099 form, the 1099-MISC is used to report it.
This form was rolled out by the IRS in 2020 to report money that has been paid to individuals, who did work but weren’t employees of the payer. In short, individuals, who were self-employed or freelanced, should receive a 1099-NEC from their clients.
When an individual received distributions from retirement plans, profit-sharing plans, pensions, annuities, insurance contracts, or IRAs, he/she should get a 1099-R from the plan issuer to report the income. Note that even if someone receives a 1099-R, not every distribution from tax-deferred or retirement accounts is taxable. Nontaxable distributions such as a rollover from a 401(k) plan into an IRA are also reported using this form.
If a taxpayer received dividends or other distributions such as capital gains distributions, he/she will receive a 1099-DIV to report that income. Note that, dividends, which are classified as “qualified dividends”, are subject to lower capital gains tax rates. Dividends, which are classified as “ordinary dividends”, are taxed at regular tax rates.
As you can see, pursuing 1099 CPE can easily boost your income potential and strengthen your position as an expert tax practitioner. This is simply because all kinds of individuals can receive a 1099 form for a wide range of reasons and as they need to report each 1099 to fulfill tax obligations, they might need your help.
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