The "One Big Beautiful Bill Act" (OBBBA), signed into law on July 4, 2025, is a major tax legislation that significantly alters reporting thresholds for 1099-NEC and 1099-MISC forms. Starting in 2026, businesses will only need to issue these forms for payments of $2,000 or more annually, up from the previous $600 threshold.
1099-MISC thresholds changes in One Big Beautiful Bill Act
The OBBBA raises the reporting threshold for Form 1099-MISC to $2,000 from $600 starting in tax year 2026. This is the first major update to the 1099-MISC threshold in decades and is intended to reduce paperwork for both payors and recipients.
The One, Big, Beautiful Bill will cut taxes for Americans earning under $50,000 by 14.9%. 66% of The One, Big, Beautiful Bill's tax cuts benefit families making less than $500,000. The tax cuts and economic growth from The One, Big, Beautiful Bill will increase the take- home pay for a family of four by $10,900.
Republicans' One Big Beautiful Bill Act expands who is subject to SNAP work requirements. That means that most adults up to age 64 will now have to fill out paperwork showing they are working, volunteering, or participating in a work training program for at least 80 hours a month.
The OBBB retroactively reinstated the reporting threshold in effect prior to the passage of the American Rescue Plan Act of 2021 (ARPA) so that third party settlement organizations are not required to file Forms 1099-K unless the gross amount of reportable payment transactions to a payee exceeds $20,000 and the number ...
So, if you get a 1099-K for less than the threshold, don't panic. It doesn't automatically mean you owe taxes on those payments — it just means the payment platform reported your transactions to the IRS (and possibly your state).
Use IRS Form 8962 to find out if you used the right amount of premium tax credit during the year. Use the form to compare the advance amount you use to the amount you qualify for based on your final income. If you used too much, you'll repay it via taxes.
Income tax rates
The legislation generally makes permanent the seven rates created by the TCJA, with an initial inflation adjustment in 2026 for the first two brackets (10%, 12%). The permanent brackets are: 10%, 12%, 22%, 24%, 32%, 35% and 37%.
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No Tax on Overtime is a provision that was included in a larger tax reform bill that passed in July 2025. It allows certain workers to deduct up to $12,500 in qualified overtime compensation from their taxable income on their federal income tax return. Joint filers can deduct up to $25,000.
Getting Form 1099-K from eBay
If your sales hit the payment threshold, eBay must prepare and send 1099-K copies to the IRS and to you by January 31 of the following year. IRS 1099-K payment reporting thresholds by year: $5,000 in 2024. $2,500 in 2025.
Some of the major tax changes effective from April 1, 2025, are revised tax slabs, rebate of up to Rs. 60,000, revised ITRU deadlines, calculation of partner's remuneration allowable as a deduction and revised TDS/TCS threshold limits.
It's generally better to choose the method (Standard Mileage or Actual Expenses) that gives you a larger deduction, which often depends on high-mileage, low-cost driving (mileage) versus low-mileage, high-cost driving (actual expenses like gas, repairs, insurance, depreciation). High-mileage drivers (like rideshare/delivery) often benefit from standard mileage, while those with expensive cars or high maintenance costs might save more with actual expenses. You must track mileage regardless, and if you choose actual expenses in the first year, you're locked into that method.
To avoid the 22% tax bracket (or any higher bracket), focus on reducing your taxable income through strategies like maxing out 401(k)s and HSAs, deferring bonuses, tax-loss harvesting, smart charitable giving, and strategic asset location, understanding that higher rates only apply to income within that bracket, not your entire income.
Here's what this means for everyday Americans:
1 (The “One Big Beautiful Bill” Act), which did not extend Enhanced Premium Tax Credits. As a result, premiums will increase significantly starting on Jan. 1, 2026. What this means is that premium tax credits are still available for 2026, but many people could receive less than they did before.