Episode 11: Crossing the $600/$2,000 Threshold -- How Do You Know?

In this episode of Information Return Intelligence, Jason Dinesen goes back to one of the most fundamental—and most commonly misunderstood—questions in information reporting: how do you know when you’ve crossed the 1099 reporting threshold?

With the familiar $600 threshold increasing to $2,000 for many payments starting in 2026, understanding how amounts are counted is more important than ever.

Key topics covered:

• What “Crossing the Threshold” Really Means
  • Reporting is based on the cash method and the calendar year.
  • The trigger is what you actually paid, not what was invoiced.
• Cash Method Explained (In Plain English)
  • Checks written during the year count—even if the recipient cashes them later.
  • Payments are counted in the year the money leaves your hands.
• Calendar Year vs. Your Tax Return
  • 1099 reporting always follows January 1–December 31.
  • Your organization’s fiscal year or accounting method does not control 1099 reporting.
  • As a result, the amount reported on a 1099 may differ from the deduction shown on your tax return—especially for accrual-method taxpayers.
• Practical Example Walkthrough
  • An invoice received in December but paid in January belongs on the following year’s 1099.
  • The same logic applies to year-end invoices paid after December 31.
  • This timing difference affects both:
    • Whether the reporting threshold is met, and
    • What dollar amount ultimately appears on the 1099.

Bottom line:

When determining whether you’ve crossed the $600 threshold (or $2,000 in 2026), and what amount to report:

• Think cash, not invoices.
• Think calendar year, not fiscal year.
• Don’t assume your tax return and your 1099 totals will match—because they often won’t.

🎧 Join us again next week for another episode of Information Return Intelligence.