2026 Compliance Update: BOI Reporting Ends for U.S. Companies, 1099 Thresholds Rise, and Penalty Relief Goes Automatic

Tax rules change all the time, and most business owners don’t need to follow every announcement. These three changes are different. Each one affects what you file, what you pay, or how you respond when the IRS sends a notice.

1. BOI reporting is over for U.S. companies

If you formed an LLC or corporation in the United States, you no longer need to file a Beneficial Ownership Information (BOI) report with FinCEN. A final rule that took effect on August 14, 2026 permanently removed that requirement for U.S. companies and U.S. persons. FinCEN is also deleting the information U.S. persons previously reported.

What this means for you

• If your company was formed in the U.S., you can take BOI off your compliance list, even if one or more of your owners live abroad.
• If you already filed a report, you don’t need to update or correct it.
• The requirement remains for entities formed outside the United States that are registered to do business here. Those companies still report beneficial ownership information about their foreign owners.

BOI was never the only filing that applies to foreign-owned U.S. businesses. Separate IRS reporting rules may still apply, so don’t assume this change reduces your tax filings. If you’re unsure, ask your preparer.

One more caution: if you get an unsolicited message demanding a fee to “file” BOI, don’t pay it. U.S. companies now have nothing left to file with FinCEN, so any such request is a red flag.

2. The 1099-NEC and 1099-MISC threshold is now $2,000

For payments you make in 2026, the filing threshold for most Forms 1099-NEC and 1099-MISC rises from $600 to $2,000. The 2026 forms are due in early 2027.

What stays the same

• Some categories keep different thresholds. For example, royalties are still reportable at much lower amounts, and certain payments to attorneys stay at $600.
• The threshold decides whether you must send a form. It doesn’t decide whether the income is taxable. Your contractors still owe tax on what they earn, and you can still deduct what you pay.

What to do

• Keep collecting a Form W-9 from every contractor before you pay them. It costs nothing and saves a scramble in January.
• Keep tracking payments below the threshold. Your books should match reality even when no form is issued.
• Update your bookkeeping or payroll software settings if they still use $600.

3. Penalty relief is becoming automatic

The IRS has announced a new program called Automatic Exemption from Penalty (AEP). If you have a clean compliance record, the IRS will apply relief to certain penalties during return processing, with no request from you.

The basics

• AEP covers failure-to-file, failure-to-pay, and failure-to-deposit penalties, in certain cases. It does not cover every penalty. Accuracy-related penalties and information return penalties, for example, fall outside it.
• To qualify, you generally need to have filed, paid, and deposited on time for the prior three years, with a one-time slip.
• AEP replaces First-Time Abate over a transition period. For some returns during that period, you may still need to contact the IRS and ask for First-Time Abate yourself.

If you get a penalty notice

Don’t ignore it, and don’t assume it will resolve itself. Check whether the penalty is one AEP covers, whether the return falls in the transition period, and whether you qualify. If you don’t qualify, you may still request relief based on reasonable cause. Either way, keep your filings, payments, and deposits on time. That record is what earns the relief.

What to do now

1. Foreign-owned U.S. company? Confirm with your preparer which filings still apply to you. BOI is off the list, but other IRS filings may not be.
2. Pay contractors? Update your threshold and make sure every contractor has a W-9 on file.
3. Received a penalty notice? Send it to us before you respond or pay.

If you’re not sure whether any of this affects your business, book a call and we’ll walk through it with you.

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Sources

• U.S. Treasury: FinCEN permanently ends beneficial ownership reporting for millions of small business owners
• IRS: Automatic Exemption from Penalty: What taxpayers should know
• NATP: Form 1099 filing changes under the new $2,000 threshold

This article is general information, not tax or legal advice. Your facts, entity type, and state rules can change the answer. Talk to a qualified professional before acting.