Compliance
Compliance Deep Dive: What’s New Under U.S. Information Reporting Thresholds in 2026
Recent U.S. regulatory shifts elevated information-reporting thresholds and adjusted rules for wagering losses—essential reading for businesses and nomads earning income via multiple payors.
By NomadicTax Research Team • 5-8 min read • May 31, 2026
## The Reporting Threshold Has Increased Significantly
In 2025, the One, Big, Beautiful Bill (OBBB) raised the threshold for IRS information reporting under § 6041 from **$600** to **$2,000** for payments made to non-employees and specified entities, effective **January 1, 2026**.([irs.gov](https://www.irs.gov/irb/2026-19_IRB?utm_source=openai))
This means: payors are no longer required to issue 1099-MISC or 1099-NEC for amounts over $600 but under $2,000—they only must report if exceeding the new $2,000 threshold. Entrepreneurs, freelancers, and platforms should update their bookkeeping and payment tracking accordingly.
## Limitations on Wagering Loss Deductions Modified
The OBBB also changed § 165(d), which deals with reporting gambling and wagering losses. Under the new rule effective for tax years beginning after December 31, 2025: **losses can be deducted up to 90% of wagering income**, and only to the extent of gains.([irs.gov](https://www.irs.gov/irb/2026-19_IRB?utm_source=openai))
For example, if in 2026 you win $10,000 from gambling and lose $12,000 wagering, you may deduct up to $9,000 (90% of the $10,000), not the full $12,000.
## Who Is Impacted? Practical Implications
- **Freelancers receiving multiple small payments**: Under the old regime, payments between $600 and $2,000 required reporting—now unless exceeding $2,000 aggregate, no Forms 1099-NEC/MISC.
- **Platforms and third-party settlement organizations**: Must adjust their reporting triggers and backup withholding systems.
- **Gamblers and high-rollers**: Need precise tracking of gains vs losses; loss deductions restricted.
## Compliance Tips & Best Practices
- Maintain payment logs to each payee: once you have records that avoid $2,000 across all payments, you can avoid 1099 filings.
- Ensure contract structures reflect know-your-payee practices; consider asking for SSN/ITIN earlier.
- Use bookkeeping/project management tools that aggregate payments by payer.
- For wagering, retain trustworthy records of both winnings and losses. Accounting software or spreadsheets with dates, sources, amounts.
## Action Steps Before Filing Season 2027
- Audit your payment trails for 2026, especially non-employee compensation.
- Update internal procedures or platform rules to track threshold breach.
- Consult a tax advisor if you operate across jurisdictions—you may be subject to foreign reporting even if U.S. threshold not met.
- Align tax software to new rules: form-generation updates, reporting limit changes.
**Bottom line**: The new thresholds under U.S. law reduce paperwork for smaller payors, but businesses and individuals who cross the lines (whether in income or wagering) will be held to the stricter rules. Staying aware and building the right record-keeping structure now will reduce surprises at filing time.