Compliance
Compliance Insights: Preparing for IRS Rule Changes in the 2025 Filing Season
With new reporting thresholds and reliefs, U.S. taxpayers & preparers must adapt fast to changes including 1099-K limits, PTIN renewals, and One, Big, Beautiful Bill reporting requirements.
By NomadicTax Research Team • 6 min read • November 17, 2025
## What’s Changing for U.S. Tax Payers & Preparers in 2025-2026
Recent announcements by the IRS introduce several important compliance changes:
- **Form 1099-K threshold reverted to $20,000**, affecting many who sold goods/services via third-party platforms. ([irs.gov](https://www.irs.gov/newsroom/news-releases-for-october-2025?utm_source=openai))
- **Penalty relief offered for new reporting requirements** under the _One, Big, Beautiful Bill_ (OBBB) particularly for cash tips and overtime reporting. Employers must understand due dates and documentation expectations. ([stayexempt.irs.gov](https://www.stayexempt.irs.gov/newsroom?utm_source=openai))
- **PTIN renewals due for tax preparers** as renewal period opens for 2026 season. Late renewals can delay return filings. ([irs.gov](https://www.irs.gov/newsroom/news-releases-for-october-2025?utm_source=openai))
- **401(k) contribution limits increased** for 2026 ($24,500 up from $23,500) and IRA limits also adjusted. ([stayexempt.irs.gov](https://www.stayexempt.irs.gov/newsroom?utm_source=openai))
## Impacts & Who Needs to Take Notice
- **Individual Sellers & Gig Workers**: Lower 1099-K threshold means platforms must report more transactions, and individuals may receive unexpected tax forms.
- **Employers & Restaurants**: Must adjust systems to report tips and overtime properly under OBBB to avoid penalties.
- **Tax Preparers**: Keep PTIN current; stay informed of rule changes to serve clients accurately.
- **Retirement Savers**: Higher limits mean an opportunity to shelter more income; budget adjustments required.
## Action Plan: Steps to Stay Compliant
1. **Review sales platform activity** to see if you cross the new threshold and prepare for more 1099-K forms.
2. **Update payroll and POS software** to track tips, qualified overtime under new reporting standards.
3. **Renew PTIN promptly**—check credentials and avoid disruptions.
4. **Adjust retirement contributions** planning in anticipation of higher limits.
5. **Maintain documentation**: backing up claims like “other withholding”, fuel credit statements, etc., to avoid delays. The IRS has announced increased review of “other withholding” claims on Line 25C. ([irs.gov](https://www.irs.gov/newsroom/irs-casst-announce-2025-filing-season-changes-aimed-at-preventing-spread-of-scams-schemes-new-fuel-tax-credit-statement-and-increased-review-of-other-withholding-claims-among-highlights?utm_source=openai))
## Example Scenario
- **Small online seller** sold $25,000 worth of crafts via an online platform in 2024: now they’ll receive a 1099-K form due to threshold, needing to include that income unless exempt.
- **Restaurant employer** needs to confirm whether tip sharing or overtime pay meets the definition of “cash tips” or “qualified overtime compensation” to comply with OBBB’s reporting without penalties.
- **Retiring in 2026?** Max out 401(k) contributions up to $24,500; plan for IRA contributions in line with adjusted limits.
**Bottom line**: Staying ahead of compliance changes is vital this season. Missing thresholds or reporting new categories incorrectly can lead to penalties. Use trusted sources like IRS.gov and get expert help for complex cases.