The year-end close is the same work as every month end, done more carefully, with a few extra obligations attached. For 2026 one of those obligations changed. Fewer contractors will need a Form 1099, and businesses that set their processes up around the old $600 threshold will need to adjust.
The 1099 change for 2026
The One Big Beautiful Bill Act, Public Law 119-21, raised the information reporting threshold for most payments reported on Forms 1099-NEC and 1099-MISC from $600 to $2,000 in a calendar year. It applies to payments made after 31 December 2025, so it applies to the returns you file in early 2027 for 2026 payments. The IRS says the threshold may be adjusted for inflation from 2027.
The same $2,000 figure now applies to backup withholding on those payments.
The exceptions. Not everything moved. Gross proceeds paid to an attorney, reported in box 10 of Form 1099-MISC, are still reported from $600. Read the current IRS instructions for each box before assuming a payment is below the line.
Form 1099-K. Separately, the same law restored the earlier threshold for payment platforms. A third-party settlement organisation is not required to issue a Form 1099-K unless payments to the payee exceed $20,000 and the number of transactions exceeds 200.
What the change means in practice
Contractors you paid between $600 and $1,999 in 2026 generally no longer need a Form 1099-NEC for those payments. That reduces filing volume, but it does not reduce the record-keeping. You still need to know who you paid, how much and for what, and you still need a Form W-9 from anyone who may cross the threshold.
Payments are counted per payee across the year. A contractor paid in small amounts throughout the year can still cross $2,000.
A year-end checklist for 2026
Vendors and contractors
Accounts
Revenue and receivables
Costs and liabilities
Payroll
Close the year
Deadlines in early 2027
Forms 1099-NEC, to recipients and to the IRS, and Forms W-2 are due by 31 January. In 2027, 31 January falls on a Sunday, so the deadline moves to the next business day, Monday 1 February. Other 1099 forms and filing methods have their own dates, so check the current IRS instructions for each.
What a good year-end close will not do
It will not prepare your tax return. The close produces the books your CPA prepares the return from. Tax positions, elections and planning belong with them.
It will not fix a year of unreconciled books in December either. If the monthly closes were skipped, start the catch-up now. A year-end close is fast only when the eleven before it were done.
Frequently asked questions
What is the 1099 threshold for 2026?
For payments made after 31 December 2025, most payments reported on Forms 1099-NEC and 1099-MISC are reportable only once they reach $2,000 in the calendar year, up from $600. Gross proceeds paid to attorneys are still reported from $600.
Do I need to issue a 1099 to a contractor I paid $1,500 in 2026?
Generally no, for nonemployee compensation, because the 2026 threshold for Form 1099-NEC is $2,000. Check the IRS instructions for the specific type of payment, and keep the contractor's Form W-9 on file.
When are 1099s due in 2027?
Forms 1099-NEC are due to recipients and the IRS by 31 January. Because 31 January 2027 is a Sunday, the deadline moves to Monday 1 February 2027.
Did the Form 1099-K threshold change?
Yes. The One Big Beautiful Bill Act restored the earlier rule, so payment platforms are not required to issue Form 1099-K unless payments to a payee exceed $20,000 and there are more than 200 transactions.
What should a year-end close checklist include?
Collecting Forms W-9, reconciling every account, reviewing receivables and revenue cut-off, accruing expenses and bonuses, counting inventory, reconciling payroll, locking the year in the accounting system and preparing a package for the CPA.
Where CFOLogic fits
We run the year-end close as part of the monthly rhythm: reconciliations, accruals, the vendor list and the 1099 schedule, with a package your CPA can work from directly. We are not a CPA firm. Tax returns and filings stay with your CPA or one of our CPA partners, and we keep the books they file from.