Frequently Asked Questions
You Have Questions, We Have Answers
Who Needs a 1099?
If you hire independent contractors, freelancers, or consultants and pay them more than $600 in business-related payments, then you’ll need to prepare and issue a Form 1099-NEC. Effective after December 31, 2025, the $600 threshold will be increased to $2,000. The form is due to recipients by February 2, 2026, and is to be e-filed with the IRS by the same date.
** Issuers are no longer automatically required to furnish copies to recipients. However, if recipients request copies, the issuer must comply. If requested prior to January 1, the issuer must furnish by January 31 (or next business day when January 31 falls on the weekend). If the request is made after January 1, the issuer must furnish by 30 days after requested. https://www.congress.gov/bill/118th-congress/house-bill/3797
What is the correct way to prepare Form 1099-NEC?
Correct Form W-9s are the key to correct 1099-NECs. To avoid possible matching notices with the IRS, it is important to ensure that the official name on the W-9 that corresponds with the Taxpayer Identification Number (TIN) matches exactly what is on file with the IRS.
What are the Tax Advantages of a 1031 Exchange?
- Since 1921, the IRS allows 100% of realized gains from property sales in a trade or business to be deferred
- If an investor sells a property and uses the proceeds to buy a similar property, they can defer capital gains and losses indefinitely or until they make a final sale of a property (For more information, see blog post: 1031 Exchanges (Like-Kind): Opportunity Zones & Delaware Statutory Trusts (DSTs) to download the PowerPoint).
One Big Beautiful Bill Act: What You Need to Know Now
Permanent extension of tax rates (10%, 12%, 22%, 24%, 32%, 35%, & 37%) beginning in 2026
•Additional increase ($1k single, $2k MFJ, $1.5k HH) (2025-2028)
•SALT cap and income phaseouts increase 1% each year from 2026-2033, then remain at 2033 levels.
Clean Vehicle Credit Expirations
The Act accelerates the end of several clean vehicle credits:
- New Clean Vehicle Credit (30D): Not allowed for any vehicle acquired after September 30, 2025
- Used Clean Vehicle Credit (25E): Not allowed for any vehicle acquired after September 30, 2025.
- Qualified Commercial Clean Vehicle Credit (45W): The credit will not be allowed for any vehicle acquired after September 30, 2025.
https://www.irs.gov/newsroom/one-big-beautiful-bill-provisions
One Big Beautiful Bill Act: What You Need to Know Now (cont'd)
No Tax on Tips
- Effective 2025 through 2028, employees and self-employed individuals may deduct qualified tips they received in occupations the IRS identified as “customarily and regularly receiving tips” on or before December 31, 2024, and are reported on a Form W-2, Form 1099, another statement furnished to the individual, or on Form 4137 if the individual directly reports the tips.
- “Qualified tips” include voluntary cash or charged tips received from customers, including shared tips.
- Maximum annual deduction is $25,000.
- For self-employed individuals, the deduction cannot exceed net income (before this deduction) from the trade or business where tips were earned.
- Phases out for taxpayers with modified adjusted gross income over $150,000 ($300,000 for joint filers).
Treasury posts preliminary list of jobs eligible for no tax on tips
No Tax on Overtime
- Effective 2025 through 2028, individuals may deduct the portion of qualified overtime pay that exceeds their regular rate of pay (for example, the “half” portion of “time-and-a-half”).
- Overtime must be reported on Form W-2, Form 1099, another statement furnished to the individual, or directly by the individual.
- Maximum annual deduction is $12,500 ($25,000 for joint filers).
- Phases out for taxpayers with modified adjusted gross income over $150,000 ($300,000 for joint filers).