The 2026 changes that hit small service businesses

Three federal numbers changed for the 2026 tax year: the 1099-NEC threshold, the 1099-K threshold and the IRS mileage rate. A 1099-NEC is now required at $2,000 per payee for payments made on or after January 1, 2026 (it was $600), and payment apps send a 1099-K for more than $20,000 and more than 200 transactions in the year.

The mileage rate rose mid-year, and one New Hampshire threshold matters too. Here is what each change means for a small service business. I'm a bookkeeper, not a tax preparer. I work alongside your CPA.

What changed for 1099-NEC forms in 2026?

The filing threshold for paying a non-employee is now $2,000 per payee for payments made on or after January 1, 2026 (it was $600). If you pay a helper, a subcontract cleaner or a fill-in dog walker, you only owe them a 1099-NEC once your total payments to that person reach the threshold for the year.

Fewer forms is good news, but it makes tracking by person more important, not less. You still need to know who you paid and how much, and you still want a W-9 from each helper before the first payment, so you are ready if they cross the line in December.

When does a payment app send a 1099-K in 2026?

Platforms such as PayPal, Venmo for business, Square and the processors behind marketplace apps send a 1099-K for more than $20,000 and more than 200 transactions in the year. The IRS confirms this threshold on its own Form 1099-K page.

Many small service businesses will never see a 1099-K. That does not make the income invisible. All business income is taxable whether or not a form arrives, so your books, not the app's paperwork, are the record that counts.

Why are there two mileage rates for 2026?

The IRS raised the business standard mileage rate in the middle of the year. For 2026 it is 72.5 cents per business mile from January 1 to June 30, 2026, and 76 cents per mile from July 1 to December 31, 2026. A single annual total is no longer enough: your log needs dates, so the miles before July and the miles after are multiplied by different rates.

For dog walkers, cleaners, lawn crews and anyone else who drives between clients, mileage is often the biggest deduction of the year. A dated log you keep as you go is worth far more than one rebuilt from memory in March.

Does New Hampshire's Business Profits Tax apply to my business?

Gross business income over $109,000 means a New Hampshire Business Profits Tax return is due, according to the NH Department of Revenue Administration. The test is gross business income, the money coming in, not the profit left over, and it applies to sole proprietors as well as companies.

If your business is growing toward that line, tell your tax preparer early. Clean monthly books show you where you stand all year instead of finding out at filing time.

When are 2026 estimated tax payments due?

The IRS due dates for estimated tax are April 15, June 15 and September 15 of the tax year, and January 15 of the next year (a date on a weekend or holiday moves to the next business day). Your tax preparer sets the amounts. What I give them is current income and expense totals, so the estimate is based on real numbers.

What should I do about these changes now?

• Keep a running total of what you pay each helper, by person.
• Collect a W-9 from every helper before the first payment.
• Keep a dated mileage log, so trips before and after July use the right rate.
• Record app payouts at the full amount clients paid, with fees as a separate expense.
• Watch the year's gross business income if you are getting close to the New Hampshire threshold.

If that list feels like a lot to keep up with, that is the work I do every month. The 2026 changes are a good reason to get the books current before the year ends.