Tax laws change often, and for 1099 contractors, the hardest part is figuring out which changes affect the business. The One Big Beautiful Bill Act tax changes affect several rules involving 1099 reporting, business deductions, qualified business income, and individual tax planning.

This guide focuses on the provisions most likely to matter to self-employed professionals, CRNAs,NPs, locum tenens providers, and other 1099 contractors.

What is the One Big Beautiful Bill Act?

The One Big Beautiful Bill Act (OBBB) became a law in 2025. It is a broad federal tax and spending law with provisions affecting both individuals and businesses. Some changes began in 2025, while others apply in 2026 and later years. The IRS provides an overview of the One Big Beautiful Bill Act tax changes.

For 1099 professionals, six changes deserve the most attention.

1. The 1099-NEC and 1099-MISC Reporting

For payments made in 2026, the general information-reporting threshold for many payments that previously used the $600 threshold increased to $2,000. This includes Form 1099-NEC non-employee compensation and several types of Form 1099-MISC payments. But some payments still have special thresholds and reporting rules.

For a broader overview, review the tax forms 1099 contractors should know.

What This Means for Contractors Who Hire Other Contractors

Businesses may send out fewer 1099 forms, but good vendor records still matter. Continue collecting Form W-9 on contractor onboarding and track payments by payee. Additionally, backup withholding is a different trigger than the reporting threshold. If a contractor does not provide a correct Taxpayer Identification Number (TIN), or if the IRS informs the business that there is a name/TIN mismatch, the business must withhold 24% of payments made to that contractor and report it even if the total amount paid is less than $2,000.

2. The $2,000 Threshold Will Adjust for Inflation

The $2,000 base threshold applies for 2026. Beginning after 2026, it adjusts for inflation. Therefore, contractors should check the current IRS information reporting rules each year rather than permanently using $2,000.

3. The Form 1099-K Threshold Returned to $20,000 and 200 Transactions

For qualifying third-party settlement organizations (TPSOs), such as certain payment apps and online marketplaces, federal reporting generally applies when both conditions are met:

• Gross reportable payments exceed $20,000
• Transactions exceed 200

This rule determines when qualifying platforms must issue Form 1099-K. It does not determine whether the underlying business income is taxable. Review the dedicated Form 1099-K threshold for 2026 for the payment-platform and credit-card distinctions.

Fewer Forms Do Not Mean Less Income to Report

Contractors should still track business income when no 1099-K or 1099-NEC arrives, a client pays through ACH, or payments fall below an information-reporting threshold. Income-reporting obligations do not depend solely on receiving a tax form.

4. The Qualified Business Income Deduction Is Now Permanent

The qualified business income deduction, or QBI deduction under Section 199A, is now permanent. Eligible owners of sole proprietorships, partnerships, S-Corporations, and certain other pass-through businesses may qualify for a deduction of up to 20% of qualified business income, subject to applicable limits.

Why High-Income Healthcare Contractors Should Pay Attention

Healthcare and other specified service businesses can face additional QBI limitations as taxable income rises. Therefore, business structure, S-Corp wages, retirement contributions, business profit, filing status, and taxable income may all affect QBI planning.

5. 100% Bonus Depreciation Is Back Permanently for Qualifying Property

OBBB has made permanent the 100% bonus depreciation for eligible property acquired and placed in service after January 19, 2025. In plain English, a business may be able to deduct the qualifying cost in the first year instead of recovering it gradually through depreciation.

What This Could Mean for 1099 Professionals

Qualifying property may include computers, office or professional equipment, furniture, certain business vehicles, and other depreciable business assets. However, a larger first-year deduction does not make an unnecessary purchase a sound business decision.

6. The SALT Deduction Cap Is Higher

The state and local tax (SALT) deduction is an individual itemized deduction rather than a Schedule C business deduction. Still, the higher SALT deduction 2026 limit may affect the overall tax picture for self-employed taxpayers who itemize.

Why This May Matter to High-Income 1099 Professionals

For 2026, the SALT limit is $40,400, or$20,200 for married taxpayers filing separately. The phase-down begins above $505,000 of modified adjusted gross income, or $252,500 for married filing separately. However, the limit cannot fall below $10,000, or $5,000 for married filing separately.

Charitable Giving Rules Also Changed for 2026

Beginning in 2026, eligible non-itemizers may deduct up to $1,000 of qualifying cash charitable contributions, or $2,000for married couples filing jointly. Meanwhile, itemizers generally face a new 0.5% of adjusted gross income floor before charitable contributions become deductible.

Contractors making larger gifts should review these rules alongside itemizing, SALT, and year-end planning. See our guide to bunching charitable donations.

The New Enhanced Deduction for Seniors

For 2025 through 2028, taxpayers 65 and older will be able to take an additional $6,000 deduction per eligible person. If married, both spouses may receive up to $12,000 when qualified. This deduction is available whether the taxpayer takes the standard deduction or itemizes it. 

However, the $6,000-per-person Senior Deduction gradually decreases once modified adjusted gross income (MAGI) exceeds $75,000 ($150,000 for married couples filing jointly). For self-employed professionals approaching retirement, this is another reason to consider taxable income alongside business profit, retirement contributions, and other year-end planning decisions. For retirement-related planning, review tax planning after 50.

The New Car Loan Interest Deduction

1099 contractors financing a new personal-use vehicle may have another temporary deduction to consider. From 2025 through 2028, up to $10,000 of qualified car loan interest per year may be deductible. However, the loan and vehicle must be eligible of certain requirements – loan must have originated after 2024, vehicle must be new, driven mostly for personal use, and final assembly must be in the United States.

The deductible amount begins to phase out when modified adjusted gross income (MAGI) exceeds $100,000 ($200,000 for married couples filing jointly). Because this provision specifically applies only to qualifying personal-use vehicles, 1099 contractors should keep this personal deduction separate from business mileage and other business-related vehicle expenses.

Work With 1099 Accountant on 2026 Tax Planning

The One Big Beautiful Bill Act tax changes affect 1099 reporting, deductions, and year-end planning. However, not every provision applies to every contractor.

1099 Accountant helps CRNAs, locum tenens providers, and other self-employed professionals review business income, bookkeeping, estimated taxes, deductions, and entity strategy under current tax rules.

Schedule a tax-planning consultation with 1099 Accountant today or contact us at (855) 529-1099.