1099 threshold change for 2026. Surprised this isn't getting more attention.

1099 threshold change for 2026. Surprised this isn't getting more attention.

Julius VincentBusiness Member
Tax Strategist | CPA, MBA + Wharton FP&A | CFO-Level Planning · Houston, TX · Member since 2025 · 157 posts · 172 votes

Been MIA from the forums for a bit. But every tax season I see investors get tripped up by those 1099 questions on the 1040. "Did you make payments requiring a 1099? Did you file or intend to file?" Easy to gloss over but can quietly cause headaches.

The good news I'm excited about is that the threshold for 1099-NEC and 1099-MISC jumped from $600 to $2,000 for payments made in 2026. This came out of the One Big Beautiful Bill Act last July. The IRS hasn't exactly been laser-focused on enforcing those 1040 questions, but the higher threshold is going to be a real relief for my clients who pay various contractors in cash throughout the year. And this doesn't change whether the recipient reports the income, you just don't have to issue the form. One caveat is that some states haven't followed the federal change, so check your state rules to confirm.

Anyone else's clients/CPAs already planning around it?

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  • Michael PlaksPro Member
    Tax Accountant / Enrolled Agent · Houston, TX · Member since 2014 · 5k+ posts · 6k+ votes
    5mo

    What do you mean by "planning around it"?  :)

    I think one of the reasons it's not widely mentioned was to avoid confusion with the effective date. For 2025 we still have $600.

    The other reason is that it's basically a non-event, IMHO.

  • Julius VincentBusiness Member
    OP
    Tax Strategist | CPA, MBA + Wharton FP&A | CFO-Level Planning · Houston, TX · Member since 2025 · 157 posts · 172 votes
    5mo

    @Michael Plaks - Lol, fair question. By "planning around it" I mainly meant the practical stuff...like not having to chase down W-9s from every small vendor or handyman under $2,000. That's always been an awkward ask with clients who pay folks in cash here and there, and honestly I've never had the IRS come knocking on those 1040 questions, regardless of how they're answered. Have you?

    Horizon Wealth & Tax Advisors510 Reviews
    • Michael PlaksPro Member
      Tax Accountant / Enrolled Agent · Houston, TX · Member since 2014 · 5k+ posts · 6k+ votes
      5mo
      Quote from @Julius Vincent:

      @Michael Plaks - Lol, fair question. By "planning around it" I mainly meant the practical stuff...like not having to chase down W-9s from every small vendor or handyman under $2,000. That's always been an awkward ask with clients who pay folks in cash here and there, and honestly I've never had the IRS come knocking on those 1040 questions, regardless of how they're answered. Have you?

      I had to ask. :) 

      No, and ironically the only times my clients dealt with 1099 issues were when they did file them, but the SSNs ended up being fake.
    • Julius VincentBusiness Member
      OP
      Tax Strategist | CPA, MBA + Wharton FP&A | CFO-Level Planning · Houston, TX · Member since 2025 · 157 posts · 172 votes
      5mo
      Quote from @Michael Plaks:
      Quote from @Julius Vincent:

      @Michael Plaks - Lol, fair question. By "planning around it" I mainly meant the practical stuff...like not having to chase down W-9s from every small vendor or handyman under $2,000. That's always been an awkward ask with clients who pay folks in cash here and there, and honestly I've never had the IRS come knocking on those 1040 questions, regardless of how they're answered. Have you?

      I had to ask. :) 

      No, and ironically the only times my clients dealt with 1099 issues were when they did file them, but the SSNs ended up being fake.

      Ha, that's counterintuitive. The folks actually trying to comply end up holding the bag. Solid argument for running TIN matching before filing anything.

      Horizon Wealth & Tax Advisors510 Reviews
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