Tax Planning
Tax Planning in the U.S.: How the One Big, Beautiful Bill Changes 1099 Reporting Rules
With new thresholds and reporting rules under the One Big, Beautiful Bill, small businesses and gig workers in the U.S. can adjust how they track income—and reduce paperwork—while staying compliant.
By NomadicTax Research Team • 5-8 min read • November 14, 2025
## What’s Changed Under the One Big, Beautiful Bill (OBBB)
- **1099-K Thresholds Restored**: The IRS has reversed the lower thresholds from the American Rescue Plan Act of 2021. As of now, payment settlement organizations must issue Form 1099-K only if they exceed **$20,000 in gross payments and 200 transactions**. ([irs.gov](https://www.irs.gov/newsroom/irs-issues-faqs-on-form-1099-k-threshold-under-the-one-big-beautiful-bill-dollar-limit-reverts-to-20000?utm_source=openai))
- **New Rules for Car Loan Interest Reporting**: Lenders who receive interest on passenger vehicle loans in the course of business and collect $600 or more must report it. For 2025, transitional relief allows statements rather than full return filings, under specific conditions. Notice 2025-57 explains more. ([irs.gov](https://www.irs.gov/newsroom/treasury-irs-provide-transition-relief-for-2025-for-businesses-reporting-car-loan-interest-under-the-one-big-beautiful-bill?utm_source=openai))
## Who’s Affected & What This Means
| Group | Prior Thresholds | New Thresholds/Exemptions |
|---|---|---|
| Gig workers & small sellers (e.g., Etsy, ride-sharing) | $600, no minimum transaction count | Must exceed **$20,000 & 200 transactions** with a platform to get a 1099-K ([irs.gov](https://www.irs.gov/newsroom/irs-issues-faqs-on-form-1099-k-threshold-under-the-one-big-beautiful-bill-dollar-limit-reverts-to-20000?utm_source=openai)) |
| Individuals paying interest on personal car loans | Generally no reporting if personal use; business lenders only under certain rules | Lenders need to report if $600+ and use qualified vehicles; in 2025 they can satisfy requirements with accessible statements, not necessarily full returns. ([irs.gov](https://www.irs.gov/newsroom/treasury-irs-provide-transition-relief-for-2025-for-businesses-reporting-car-loan-interest-under-the-one-big-beautiful-bill?utm_source=openai)) |
## Planning Tips & Strategies
1. **Keep all income records** even if no 1099 arrives—tax law still requires reporting income regardless. If selling $1,000 worth of handmade goods without meeting the 1099-K threshold, you still report.
2. **Monitor payment platforms**: A seller using multiple platforms might have small amounts on each but collectively will need to meet the threshold before 1099-K triggers.
3. **Understand what’s “qualified passenger vehicle loan”**: Vehicles under 14,000 pounds, final assembly in the U.S., used personally. Used vehicles, leased ones, or those over weight don’t qualify. ([irs.gov](https://www.irs.gov/newsroom/treasury-irs-provide-transition-relief-for-2025-for-businesses-reporting-car-loan-interest-under-the-one-big-beautiful-bill?utm_source=openai))
4. **Business structure matters**: If you’re a lender or get paid by individuals, the reporting party for 1099-K or interest is critical—understand who needs to file and with whom.
5. **Prepare for 2026 changes**: Thresholds for 1099-MISC and 1099-NEC rise to $2,000. Know that forms for non-employee compensation (e.g. contractors) will see changes. ([irs.gov](https://www.irs.gov/newsroom/one-big-beautiful-bill-provisions?utm_source=openai))
## Example Scenarios
- **Gig worker selling crafts**: If Amy sells crafts on Etsy, she used to get a 1099-K at $600. Now, unless she makes over $20,000 and 200 sales in a year, Etsy won’t issue it—but Amy still reports all income.
- **Car dealership or finance lender**: XYZ Auto Garage receives over $600 in interest from customers’ car loans for qualified vehicles. For 2025, they can meet reporting by sending an annual or monthly statement instead of a formal IRS return.
## Actionable Next Steps
- Review your income over the last 12 months across platforms. Are you getting close to $20,000 and 200 transactions on any platform?
- If lending or engaged in car financing, determine if your vehicles are “qualified” and plan statements accordingly.
- Update accounting or tax software so that for tax year 2026, 1099-MISC/NEC thresholds at $2,000 are reflected.
- Consult a tax advisor if you’re handling multiple income sources to avoid mistakes.
## Bottom Line
The One Big, Beautiful Bill makes life easier for many with side hustles or lower income via platforms by reducing mandatory IRS reporting burdens—but it **does not** reduce your obligation to report all income. For those affected, the key is strong recordkeeping and awareness of thresholds.