IRS Form 1099 Changes Explained: Key Updates to 1099-NEC, 1099-MISC, and 1099-K

The IRS has recently introduced important changes to reporting requirements that affect businesses and independent contractors. With the passage of the One Big Beautiful Bill Act on July 4, 2025, the rules for Form 1099-NEC, 1099-MISC and 1099-K updates have shifted in ways that impact how income is reported and filed. Understanding these updates is essential for staying compliant and avoiding costly mistakes.  

In this blog, we shall understand what’s new with the reporting thresholds and filing rules. We shall also explore how these updates affect businesses, contractors, and payment platforms. We shall also walk through the practical steps you can take to prepare for the coming tax season.  So, let’s take a closer look at the latest IRS changes to Form 1099-NEC, 1099-MISC, and 1099-K, and what they mean for your business moving forward. 

Form 1099-K Updates 

Another big change affects Form 1099-K, which covers payments made through third-party apps and credit card processors like PayPal, Venmo, and Stripe. The original plan to lower the reporting threshold to $600 caused confusion for businesses and casual users alike. That change was delayed several times, and with the One Big Beautiful Bill Act, it has now been permanently rolled back.  

Starting with the 2024 tax year and continuing forward, the original threshold is back in place. This means a Form 1099-K will only be issued if you have more than $20,000 in total payments and more than 200 transactions in a year. For most individuals and smaller sellers, this means fewer unexpected tax forms and clearer rules to follow. 

Form 1099-NEC and 1099-MISC updates 

For now, the reporting threshold for Form 1099-NEC and Form 1099-MISC remains at $600 for the 2025 tax year. This means if you pay $600 or more in nonemployee compensation or certain types of miscellaneous income, you’ll need to issue these forms.  

The deadline to send copies to recipients and file Form 1099-NEC with the IRS for 2025 income is January 31, 2026. Looking ahead, there’s a major change coming. Beginning with the 2026 tax year, the threshold for both forms will rise to $2,000, which should ease reporting requirements for many businesses. Starting in 2027, that $2,000 amount will be adjusted annually to keep up with inflation. 

New Form 1099-DA for Digital Assets 

Starting with the 2025 tax year, brokers such as crypto exchanges, payment processors, and hosted wallet providers are now required to issue a new form called Form 1099-DA. For this year, the form will report only the gross proceeds from digital asset sales or exchanges. Beginning in 2026, brokers will also need to report the cost basis (i.e. what the asset was originally purchased for) and the resulting gain or loss. This change is designed to give taxpayers and the IRS clearer records of digital asset activity. While there is still debate in Congress about whether decentralized finance (DeFi) platforms should fall under these rules, the current IRS guidance has not excluded them. 

What this means for you: If you trade or invest in digital assets, expect to receive Form 1099-DA starting in early 2026 for your 2025 transactions. 

Table 1: At a Glance: 1099 Form Updates (as of Sept 2025) 

Takeaway: Most businesses can relax until 2026, when higher thresholds and new reporting rules start to apply. 

Read Also: The One Big Beautiful Bill Act: Key Federal Tax Changes for 2025

How KMK Can Help 

The recent changes to Form 1099-NEC, 1099-MISC, and 1099-K updates, along with the introduction of Form 1099-DA, can be confusing and time-consuming for businesses to manage. At KMK Ventures, we take care of the details so you don’t have to worry about missing deadlines or making errors. Our team can: 

• Track which forms apply to your business and when. 

• Prepare and file accurate 1099 forms on time. 

• Help you adjust to the new $2,000 threshold rules coming in 2026. 

• Guide you through reporting for digital assets like crypto, stablecoins, and NFTs. 

• Provide year-round support to keep you compliant and stress-free.

With KMK Ventures handling your reporting needs, you can focus on running your business while staying fully compliant with IRS rules. 

Conclusion 

The IRS changes to Form 1099-NEC, 1099-MISC, and 1099-K updates, along with the new Form 1099-DA, are meant to simplify reporting and provide more clarity. For most businesses, the biggest shifts will happen in 2026 and beyond, when new thresholds and digital asset reporting rules take effect. Preparing now will make those transitions much smoother. 

Still not clear? That’s where KMK Ventures comes in. We combine deep tax expertise with hands-on support to make sure your business stays compliant, efficient, and ready for the future.