This week’s edition of Tax Breaks comes to you from downtown Denver, Colorado, the first stop on my multi-conference tax tour this summer.
(Fun fact: I spent the three-hour plane ride from Philadelphia talking tax and tariffs with my seat mate. I swear it was his idea—mostly.)
It likely won’t surprise you at all to learn the agendas and conversation at the events are full of questions and commentary focused on the One Big Beautiful Bill Act (OBBBA). Tax professionals and taxpayers alike are still trying to sort out the details of the 800+ pages signed into law on July 4, 2025.
One provision that has largely gone under the radar? Reporting thresholds for Form 1099-K (for payment card and third-party network transactions), Form 1099-MISC (for payments not covered by other 1099 forms), and Form 1099-NEC (for nonemployee compensation) have been changed. The old reporting threshold for Form 1099-K is now new again, as OBBBA reinstates the $20,000 and 200 transactions thresholds, retroactive to 2022 (or as if the reporting changes in the American Rescue Plan Act of 2021 had never happened)—that means that the $20,000 and 200 transactions thresholds will apply to the tax year 2025. The reporting threshold for Forms 1099-MISC and Form 1099-NEC will increase from $600 to $2,000, effective as of the 2026 tax year (the forms you’ll receive in 2027).
And while we’re still waiting for direction from the IRS and Treasury on some provisions, the IRS has issued some initial guidance with respect to new deductions for seniors, tips, overtime, and car interest. And if you had an idea about how to game the “No tax on tips” of “No tax on overtime” Congress might have already knocked it out even before any regulations have been issued.
Not all of the commentary focuses on the provisions—some tax policy pundits are also looking at deeper questions about fairness, labor markets, and whether the tax code should play favorites with how we work.
With so much focus on the individual tax breaks in OBBBA, you might have missed out on some of those business tax breaks, including making the Section 199A pass-through deduction—commonly known as the Qualified Business Income (QBI) deduction—permanent. The QBI deduction allows eligible owners of pass-through entities—such as sole proprietorships, partnerships, S corporations, and certain trusts and estates—to deduct up to 20% of their qualified business income from taxable income. You can check out four other tax breaks for businesses here.
OBBBA also offers a few surprises that may affect planning with stock options, restricted stock units (RSUs), and other types of equity awards. These include changes that influence the calculation of the alternative minimum tax (AMT), most notably in the significantly raised cap on state and local tax (SALT) deductions. Other provisions in the law concern the special tax treatment for startup company stock and tax planning around charitable donations.
And while OBBBA didn’t kill the IRS Direct File program, it still feels like it’s on its way out. A recent IRS press release reminds taxpayers who requested an extension that “IRS Free File makes it easy.” The mention of Free File in the (very) brief 123-word press release, without referencing Direct File, which also remains open through October 15, 2025, suggests that the IRS is already ready to turn the page on the program.
There’s a lot more about OBBBA to digest, so Tax Notes walked through an overview of the final bill on the latest edition of their podcast. (You can find a written transcript here.)
With that, I’ll address the most contentious bit to come out of the new law: what to call it. I’ve been advised by a few folks that, strictly speaking, I should introduce it as “Public Law 119-21, known to some as ‘One Big Beautiful Bill Act’” which feels way too long and honestly, not memorable (are you really going to remember those numbers?). Others have suggested OB3 (the math geek in me isn’t buying it), OB3 (which sounds like an extra from Star Wars), O Triple B (that sounds too much like the name of ranch in these parts), and Trump Tax 2.0 (considering the new bits, doesn’t seem to fit). I’m sticking with OBBBA, which, as I noted last week, I pronounce “Oh-bah” like the soft o in mob—and not “Ah-ba” which sounds too much like the greatest Swedish pop group of all time. If you have a better suggestion, let me know.
Enjoy your weekend,
Kelly Phillips Erb (Senior Writer, Tax)
Questions
This week, a reader asked:
My friend borrowed some money from me, and we signed an agreement between us. The agreement contains our names and addresses along with loan terms and details. My friend was paying interest for 2 years from his personal account. Last year, my friend started paying interest from his business account. And this year, my friend stopped paying any interest and said I need to fill out a W-9 before he can continue paying interest. I do not feel comfortable, nor do I want to give him my Social Security number. Do I have to fill out a W-9 for my friend to continue paying interest on the loan?
Eesh. So, I’ll spare you a lecture about the dangers of loaning money to friends and family because you likely don’t need it at this point.
And I also won’t advise on any available legal remedies. I would suggest, however, that depending on the amount of money, you consult with an attorney to determine whether the loan agreement is enforceable and how you might recover the balance if your friend refuses to pay.
Instead, I’m going to focus on the tax piece and that Form W-9.
Interest payable under a loan agreement is taxable to the recipient (here, that’s you). That doesn’t change if it’s a person paying you interest or a company paying you interest. What changes is the documentation.
Form W-9 is an IRS document used to obtain and confirm an individual’s or entity’s Taxpayer Identification Number (TIN), name, and address. It’s not typically filed with the IRS. The requester uses it to file information returns with the IRS, like a Form 1099, when there is no requirement to withhold income tax. A common example is when you work as an independent contractor—if you’re paid $600 or more by a business in a year, you’ll need to provide a W-9 so the payor can issue you a Form 1099-NEC. Other uses include reporting gambling winnings, rents and royalties, gains and losses in brokerage accounts, and, importantly here, dividend and interest payments. Remember that there are lots of different Forms 1099 and many different reporting requirements.
One of those reporting requirements is Form 1099-INT. The IRS requires payers of interest to report payments over a certain threshold (usually $10) on Form 1099-INT. But, and this is the important part, Form 1099-INT is typically issued by those in the business of lending money (specifically, Form 1099-INT says “Report only interest payments made in the course of your trade or business including federal, state, and local government agencies and activities deemed nonprofit, or for which you were a nominee/middleman.”). When you dig further into the Regs, you’ll find that you’re normally not required to file Form 1099-INT for interest on an obligation issued by an individual.
I would assume you’re not normally in the business of lending money, and your friend is not in the business of borrowing money. I don’t think that the reporting requirements apply in the first instance (the original agreement). Where your friend gets the money to repay the loan—even if it’s from his business—doesn’t change that equation.
(The One Big Beautiful Bill Act made some changes to some 1099 reporting thresholds. You can read about those here.)
Do you have a tax question that you think we should cover in the next newsletter? We’d love to help if we can. Check out our guidelines and submit a question here.
Getting To Know You Tuesday: Dorothy K. Butler
While most people may not have opportunities to showcase their talents outside of the workplace, Dorothy K. Butler stands out as an exception. A practicing tax attorney, Dorothy also makes her mark on the music scene as a professional musician in the greater Austin, Texas area. She has shared the stage with Andrea Bocelli, Bernadette Peters, The Who, Marvin Hamlisch, Il Divo and Celtic Women.
That explains why her area of special interest is working with musicians on their taxes. “As a professional musician, I know the ins and outs of being a self employed musician,” she explains. “With an LL.M. in taxation, I also understand the Internal Revenue Code. Marry the two together, and you have my favorite clients to work with.”
That also informs the biggest change that’s she’s seen in the profession in the last five years: the loss of entertainment expenses for self employed individuals. “This was a huge change,” she says.
Dorothy is the next professional to be featured in our rebooted Getting To Know You Tuesday series—a chance to get to know all kinds of tax professionals and understand that the field of tax is bigger than April 15. If you’d like to nominate a tax professional to be featured, send your suggestion to kerb@forbes.com with the subject: Getting To Know You Tuesday.
Statistics, Charts, and Graphs
The federal government must stop issuing paper checks by September 30 in favor of direct deposit, prepaid cards, or other digital payment options—that’s according to an Executive Order signed by President Donald Trump in March of this year. Now, the Social Security Administration has provided additional guidance for Social Security beneficiaries.
According to the agency, the transition primarily affects a small group of beneficiaries who have not yet switched over to electronic payments. The Social Security Administration said in its most recent communication that less than one percent of beneficiaries currently receive paper checks.
Last year, 512,690 Americans—about 0.8% of the more than 68 million total recipients—drew Social Security benefits checks. Approximately 67,826,776 Americans receive benefits by Direct Deposit.
By the numbers, the states with the most Social Security beneficiaries are California, Florida, Texas, New York, Pennsylvania, Ohio, Illinois, Michigan, North Carolina, and Georgia. That roughly follows population trends.
However, a map of states (and one district) with the largest percentages of beneficiaries who receive paper checks would look a bit different. They are Massachusetts, District of Columbia, Connecticut, Louisiana, Maine, Ohio, Alaska, Mississippi, California, and Illinois.
A Deeper Dive
Forty years ago, Live Aid performers took the stages in London and Philadelphia, Pennsylvania, to perform simultaneously. The event was a “super concert,” featuring 16 hours of rock music in two venues linked by satellite, so that people at home could watch too. More than a billion viewers in 110 countries were said to have watched the concert—organizers claimed that more than 40% of the population tuned in with many dialing in to make donations. The benefit raised over $125 million for hunger relief aimed at Africa.
In addition to some memorable moments—like a young Bette Midler introducing an even younger Madonna in Philadelphia and Phil Collins playing in London before jumping on Concorde to play drums in Philadelphia that same day with Led Zeppelin—the event had tax implications.
The precursor to Live Aid was Band Aid, a 1984 “super group” made up of such performers as U2’s Bono, Phil Collins, Boy George, Duran Duran’s Simon Le Bon, George Michael, Sting, and Jody Watley. The song that came from that first effort, “Do They Know It’s Christmas?” (admit it, it’s in your head now), became a hit, selling over two million copies and raising millions for charity.
Britain’s Labour leader at the time, Neil Kinnock, asked that all VAT revenue raised on sales of the charity record be given to famine relief. Then-Prime Minister Margaret Thatcher responded by asking, “How, in fairness could we contribute the VAT raised on the Band Aid record to the fund-raising cause, but refuse it in all other cases?” In 1985, the government agreed to make a donation to charity equivalent to the VAT collected on sales of the original 1984 Band Aid record.
The event was so successful that it supercharged the idea of using music as a catalyst to raise money and awareness for various causes around the world.
Tax Filings And Deadlines
📅 September 30, 2025. Due date for individuals and businesses impacted by recent terrorist attacks in Israel.
📅 October 15, 2025. Due date for individuals and businesses affected by wildfires and straight-line winds in southern California that began on January 7, 2025.
📅 November 3, 2025. Due date for individuals and businesses affected by storms in Arkansas and Tennessee that began on April 2, 2025.
Tax Conferences And Events
📅 July 21-23, 2025. National Association of Tax Professionals Taxposium 2025. Caesars Palace, Las Vegas, Nevada. Registration required.
📅 July 22-24, 2025. Bridging the Gap Conference. Denver Marriott Tech Center, 4900 S. Syracuse Street, Denver, Colorado. Registration required.
📅 July 28-30, 2025. Tax Summit 2025. Grand America Hotel, Salt Lake City. Registration required.
📅 August 5-September 16 (various dates), 2025. IRS Nationwide Tax Forum in New Orleans, Orlando, Baltimore and San Diego. Registration required (discounts available for some partner groups).
📅 September 17-18, 2025. National Association of Tax Professionals Las Vegas Tax Forum. Paris Hotel, Las Vegas, Nevada. Registration required.
Trivia
One of the most significant budget items for the U.S. government is interest on outstanding debt. In 2025, the Congressional Budget Office projects that the annual net interest payments will reach what level?
(A) $952 million
(B) $9.52 billion
(C) $95.2 billion
(D) $952 billion
Find the answer at the bottom of this newsletter.
Positions And Guidance
Earlier this year, the IRS announced that it was aware of a delay in processing some electronic payments—some taxpayers are receiving IRS notices indicating a balance due even though payments were made timely. A reminder that taxpayers who receive a notice but paid the tax they owed in full and on time, electronically, do not need to respond to the notice at this time. Taxpayers may monitor the status of their payments by viewing the payment activity page in their IRS online account. If a taxpayer has checked their online account and does not see the payment processed by July 15, they should call the number on their notice.
Noteworthy
KPMG LLP announced its national managing partners and principals and Chief Strategy Officer, effective immediately. The firm’s National Managing Partners and Principals are Scott Buckley, National Managing Partner, Advisory Operations; Mike Comer, National Managing Partner, Operations; David Fine, National Managing Principal, Legal & Regulatory; Dana Foote, National Managing Partner, Audit Operations; Ann Holley, National Managing Partner, Tax; Jason LaRue, National Managing Principal, Talent & Culture; Todd Lohr, National Managing Principal, Clients & Markets; Arun Rajappa, National Managing Principal, Risk Management & Compliance; Jason Rash, National Managing Partner, Audit Quality & Professional Practice; and Patrick Ryan, National Managing Partner, Advisory Strategy & Markets. KPMG also announced Phil Isom as the firm’s Chief Strategy Officer.
The PCAOB (Public Company Accounting Oversight Board) Chair Erica Y. Williams announced that she will leave the PCAOB Tuesday, July 22. Williams was originally sworn in as PCAOB Chair in January of 2022. She was reappointed in June 2024 and sworn in on October 24, 2024. Under her leadership, the PCAOB developed and executed an ambitious strategic plan to modernize standards, enhance inspections, strengthen enforcement, and improve the PCAOB’s organizational effectiveness.
Pro Publica has reported that the acting general counsel at the IRS, Andrew De Mello, refused to turn over the addresses of 7.3 million taxpayers sought by ICE (United States Immigration and Customs Enforcement) after he had identified multiple legal “deficiencies” in the agency’s request. According to Pro Publica, two days later, on June 27, De Mello was forced out of his job.
The AICPA and CIMA, which together form the Association of International Certified Professional Accountants, have once again been named a Great Place To Work (GPTW), a recognition awarded by the global organization that benchmarks and celebrates outstanding employee experience.
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In Case You Missed It
Here’s what readers clicked through most often in the newsletter last week:
You can find the entire newsletter here.
Trivia Answer
The answer is (D) $952 billion.
The Congressional Budget Office (CBO) projects that interest payments will total $952 billion in fiscal year 2025 and rise rapidly throughout the next decade, climbing from $1 trillion in 2026 to $1.8 trillion in 2035. In total, net interest payments will total $13.8 trillion over the next decade.
Feedback
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