Tips & Overtime on 1099s: What You Need to Know for 2025–2026

The IRS has issued new guidance on reporting tips and overtime, and while these topics usually live in the W-2 world, they now have implications for 1099 filers as well.In this episode, Jason Dinesen — The 1099 Guy — explains how the Big Beautiful Bill created a new personal tax deduction for qualifying tips and qualifying overtime, and how upcoming changes to Form 1099-NEC and 1099-MISC will reflect this. Jason also breaks down the difference between voluntary and non-voluntary tips, why most overtime won’t qualify for contractors, and what AP and payroll teams need to track — even though processing the payments themselves won’t change.You’ll learn:The new tip & overtime deduction created by recent legislationWhat counts as a qualifying tip (and what doesn’t)Why qualifying overtime rarely applies to contractorsHow upcoming 2026 1099 forms will include new boxesWhat issuers must track for future reportingInformation Return Intelligence delivers weekly insights to help accounting and finance pros stay compliant with 1099, 1042-S, W-9, and related reporting rules.🎙️ Hosted by Jason Dinesen, EA — The 1099 Guy