Businesses See Relief as 1099 Thresholds Increase; Prepare Now for Year-End Deadlines

Posted on September 9, 2025September 9, 2025

Signed into law on July 4, 2025, the One Big Beautiful Bill Act brings welcome changes for businesses, contractors, and online sellers by raising reporting thresholds for Forms 1099-MISC, 1099-NEC, and 1099-K. Starting in 2026, thresholds for 1099-MISC and 1099-NEC will rise from $600 to $2,000, and 1099-K will return to $20,000 and 200 transactions per year. The higher limits mean fewer forms to prepare and process, easing administrative workloads while keeping IRS reporting standards intact. Businesses can devote more time to growth and planning while continuing to track and report income accurately.

Key 1099 changes under the One Big Beautiful Bill Act

Form 1099-MISC: $2,000 threshold starting in 2026, adjusted annually for inflation from 2027 onward.
Form 1099-NEC: $2,000 threshold starting in 2026, adjusted annually for inflation from 2027 onward.
Form 1099-K: $20,000 and 200 transactions per year starting in 2026; reports payments via credit/debit cards, online marketplaces, and third-party platforms such as PayPal, Venmo, Zelle, or Apple Pay.

For 2025, existing thresholds remain in effect: 1099-MISC and 1099-NEC forms are required for payments of $600 or more, and 1099-K applies for payments exceeding $2,500 processed through payment cards or third-party networks.

AAFCPAs advises that clients review vendor records, verify W-9 information, and align internal systems now to prepare for the higher 2026 thresholds.

Prepare Now for January 1099 Deadlines

Businesses that paid $600 or more to non-employees in 2025—including contractors, consultants, attorneys, or landlords—must issue required Forms 1099 by the IRS deadlines. This includes certain payments for rent, prizes, awards, and legal settlements. Gathering and verifying vendor information now helps avoid penalties for late or inaccurate filings.

2025 1099 deadlines

Form	Due to Recipient	File with IRS (Paper)	File with IRS (Electronic)
1099-NEC	Feb 2, 2026	Feb 2, 2026	Feb 2, 2026
1099-MISC	Feb 2, 2026	Feb. 28, 2026	Mar. 31, 2026
1099-DIV	Feb 2, 2026	Feb. 28, 2026	Mar. 31, 2026
1099-INT	Feb 2, 2026	Feb. 28, 2026	—

Please note that due to the January 31, 2026 deadline falling on a Saturday, the deadline is extended to the next business day, February 2, 2026. To prepare, confirm vendor names, addresses, and Taxpayer Identification Numbers against W-9 forms, and track payments made throughout the year. Payments processed through credit cards or third-party payment platforms, such as PayPal or Venmo, are reported separately on Form 1099-K by the payment processor.

To ensure smooth 1099 filing compliance, it is essential to collect and store W-9 forms within your ERP system or electronic bill pay software at the time of vendor onboarding. This centralized approach simplifies retrieval and reduces errors during year-end reporting. Mid-year is an ideal time to conduct a vendor file review—verify tax ID accuracy, confirm entity classifications, and identify unused or outdated vendors that can be archived. This cleanup not only streamlines your vendor master but also minimizes the risk of filing delays and penalties.

Year-end 1099 analysis, mailing, and filing often coincide with busy periods of closing books and handling holiday schedules, which can make compliance challenging for organizations with limited staff. AAFCPAs can help by performing a comprehensive 1099 analysis to determine filing requirements and manage the preparation and filing of 1099s to ensure accuracy, efficiency, and secure handling of data.

How We Help

AAFCPAs provides comprehensive support to help organizations navigate 1099 reporting under the One Big Beautiful Bill Act. Our team can perform a full 1099 analysis, verify vendor information, track payments, prepare, and e-file Forms 1099-MISC, 1099-NEC, and 1099-K on your behalf, ensuring accuracy, efficiency, and secure handling of sensitive data. By combining specialized expertise, modern technology, and streamlined processes, we help finance teams manage changing thresholds, annual inflation adjustments, and other regulatory updates. This approach reduces administrative burden and allows leadership to focus on strategic priorities with confidence.

These insights were contributed by Ashleigh Marks, CPA, Consulting CFO, Nicholas M. Foresti, MBA, Consulting Controller, and Lauren Turner, MSA, Consulting CFO.

Questions? Reach out to our authors directly or your AAFCPAs partner.

AAFCPAs offers a wealth of resources on strategic tax planning and wealth preservation. Subscribe to get alerts and insights in your inbox.

About the Authors

Ashleigh Marks, CPA

Ashleigh is a leader in AAFCPAs' Outsourced Accounting & Fractional CFO (OAFC) practice, providing finance and accounting support for companies at various stages of growth, including emerging, growth-stage, mature companies, and those seeking exit or IPO. She is a recognized leader in the firm's specialized life sciences, technology, and SaaS practices. As an experienced Fractional CFO, Ashleigh excels in providing strategic financial leadership and management support. She specializes in financial planning and analysis (FP&A), developing key …

Nicholas M. Foresti, MBA

Nick is a dynamic controller in residence at AAFCPAs Outsourced Accounting & Fractional CFO practice, providing complete outsourced accounting & finance services for privately-held companies. He provides knowledgeable financial leadership and accounting oversight, including infrastructure set-up, and establishes and executes internal controls over clients’ accounting and financial procedures. One of Nick’s specialties is serving the Cannabis industry, where his cost accounting expertise is coveted. He confidently ensures that AAFCPAs’ clients remain in compliance with strict …

Lauren Turner, MSA

Lauren is a member of AAFCPAs’ Outsourced Accounting & Fractional CFO practice, providing outsourced, cloud-based finance & accounting support for nonprofits and privately-held companies. Lauren provides strategic financial and operational consulting solutions, and oversees financial procedures and internal and external team members as appropriate to ensure a smooth execution of the finance function. Lauren addresses clients’ most critical financial concerns, including: developing budgets; managing cash flow; financial forecasts & projections; performing monthly closing procedures and producing …

Related Insights

Cash Management Strategies for Life Sciences Companies

Cash drives every strategic decision in the life sciences and medical device field. Whether investing in research and development spending, advancing a therapy through clinical trials, acquiring lab equipment, or managing global vendor relationships, liquidity determines pace and flexibility. Timelines can be long. Outcomes can hinge on regulatory approvals, trial results, or market conditions beyond […]

Navigating Funding Uncertainty: Strategies for Life Sciences Organizations to Mitigate Risk

In the life sciences sector, where innovation often relies on grant funding, financial stability has become increasingly uncertain. Federal budget constraints and shifting political priorities pressure organizations to adopt a proactive approach to managing grants. As opposed to reacting to changes as they happen, AAFCPAs advises that clients anticipate potential funding risks and implement strategies […]

Managing Cash Flow and Expenses in Life Sciences

In this article: Managing cash flow presents ongoing challenges for those in the life sciences, particularly those navigating pre-clinical research and early clinical stages. With significant resources devoted to research and development (R&D), precise cash tracking across R&D and general and administrative (G&A) categories is essential for sustaining growth and demonstrating financial responsibility. Distinguishing between […]