Special Article
2026 Updates to the IRS Tax Form 1099
By Rick McIntosh
I recently had a discussion with one of our colleagues about relevant tax issues, especially as they relate to sports officials. I want to talk about three issues: Form 1099-K, reporting pay on your tax return, and the new “One Big Beautiful Bill (OBBB) deductions. The OBBB update is not baseball related.
The Form 1099-K that we receive through Arbiter is a relatively new tax form and is the result of the proliferation of payment processing companies such as Ebay, Amazon, Paypal, Apple Pay, Google Pay and many others. Old-timers may remember that we once received a 1099-MISC tax form replaced a few years ago with the 1099-NEC. We received our pay from John Porter and eventually Arbiter with a paper check.
When Arbiter started direct deposit, they acted as a payment processor and changed to issuing the 1099-K. You may have read recently about a threshold for the 1099-K changing to $20,000. This is not a threshold that defines whether your 1099-K income is taxable or not. It is merely a threshold for issuers on whether they are required to generate and distribute the form.
About five years ago, the threshold was set at $20,000, but had been creeping down over time, ending up at $600 by this year. This is the same threshold applicable to issuers of the 1099-MISC. But the current administration decided to remove that creep and return the threshold to $20,000. That meant that a payment processor that processed transactions for a specific entity totaling less than $20K were not required to generate the form. If Arbiter followed that practice, it would be possible to earn $15,000 without receiving a 1099-K form.
However, even if you do not receive the form, you as a taxpayer are still responsible for reporting the income. In my experience, this is usually a moot point as most payment processors issue a 1099-K regardless of the transaction amount. Remember, as a taxpayer, you are always required to report income, regardless of whether you received a tax form or not.
More info is available here: https://www.irs.gov/businesses/understanding-your-form-1099-k
Many of you work some cash games every year. This income is not included in the Arbiter 1099-K. It is your responsibility to total your cash receipts and add it to your 1099-K income on your Schedule C. I realize that it is easy (and likely fairly common) to stuff that cash in a pocket and forget about it for tax purposes. However, it is reportable income and I have read that a point of emphasis for the IRS this year is to be more diligent capturing unreported income. Keep in mind that while Arbiter doesn’t report cash income, there still exist records of your cash games in case any investigator is sniffing around.
I am now a few weeks into the tax season at my tax site and we’re starting to see the impacts of some of the new deductions out of the One Big Beautiful Bill (OBBB). The “senior deduction” is very straightforward. If you are at least 65, you are eligible for a $6,000 deduction ($12,000 for joint) which starts phasing out above a specified income level. All tax software will calculate the senior deduction automatically based on age and income. As a preparer, no further action is required. If your tax preparer or tax software is charging extra to calculate the deduction, you are getting ripped off. I am surprised to see so many taxpayers with some overtime in their pay. The key thing to know is that the deduction is based on what is known as the ‘premium,’ which is the half part of time and a half. W-2 forms may show the premium amount in Blk 14 or they may show total overtime, in which case a simple calculation is needed to obtain the premium. The premium is what is entered on the tax form and is deducted from AGI. We haven’t seen much regarding qualified tip deduction although I know it is easier to report for reported tips (W-2, Blk 7) as opposed to unreported tips. Unbelievably, even with the tax season already underway, there is still some unresolved tax law with tips for self-employed persons, especially with cash tips. If you have this situation, be aware that the issue may not be finalized until March. My site has been advised to defer returns with self-employed tips to late March.
If you have any questions about tax issues, you can email me at [email protected] or call me at 703-798-3578, and I’ll try to help.