Welcome back to Belk on Business! I’m Josh Belk, and in this episode, we’re continuing our series on the recent legislative updates within the “Big Beautiful Bill.” Today, I’m breaking down two major topics that will impact a wide range of business owners: updates to the Research & Experimentation (R&E) credit, and new thresholds and requirements for issuing 1099 forms.
If you’re engaged in any kind of product development, software design, or custom business solutions, the R&E credit could unlock meaningful tax savings. And if you’re working with contractors or freelancers, the new 1099 rules are essential to stay compliant in 2025 and beyond.
3 Key Takeaways
R&E Credit Refined and Expanded: Businesses with under $31M in annual receipts can now fully expense domestic R&D costs in 2025 and 2026—no amortization required.
1099 Thresholds Increased: Starting in 2025, the threshold for issuing 1099s (NEC and MISC) increases from $600 to $2,000, reducing compliance headaches for many small businesses.
Startups Can Offset Payroll Taxes: Eligible startups may use R&E credits to offset up to $250,000 in payroll tax liability—an excellent benefit for growth-stage companies.
Episode Timeline & Highlights
[0:00] - Intro to today’s focus: R&E credits and 1099 compliance
[1:10] - What qualifies as R&E: The four-part test explained
[5:20] - Expense vs. amortization rules based on company size
[6:03] - Retroactive application for expenses dating back to 2021
[7:06] - What qualifies for the credit and what doesn’t
[8:27] - How R&E credits can be used against payroll taxes
[9:13] - New 1099 thresholds and what’s changed
[10:17] - Why collecting a W-9 is critical before paying contractors
[11:02] - 1099-K rules for online sales and merchant accounts
Links & Resources
IRS R&E (R&D) Credit Details: https://www.irs.gov/credits-deductions/individuals/research-credit
Form W-9 (Request for Taxpayer Identification): https://www.irs.gov/forms-pubs/about-form-w-9
1099 Filing Guide: https://www.irs.gov/forms-pubs/about-form-1099-nec
If this episode helped clarify these tax changes for you, be sure to follow, rate, and review Belk on Business. And don’t forget to share it with another business owner or financial leader in your network. Stay sharp and compliant—until next time!
