Future of Invoicing: What US Small Businesses Should Know
US invoicing at a glance
A PDF invoice sent by email is still valid in the US. There is no federal e-invoicing mandate. What is changing is how you report and how you get paid.
Change |
Status |
What it means for you |
|---|---|---|
1099-NEC threshold |
$2,000 for payments from 2026 |
Fewer forms to file |
1099-K threshold |
$20,000 and 200+ transactions |
Fewer forms from payment apps |
Federal paper checks |
Stopped on Sept 30, 2025 |
Federal customers pay electronically |
B2B e-invoicing |
Voluntary |
Large customers may ask for it |
PDF invoice vs. e-invoice
PDF invoice: made for people. Someone reads it and types the data in.
E-invoice: a data file (usually XML) that software reads on its own. Large US companies have used this for decades as EDI.
When people talk about e-invoicing, they mean the second kind. A PDF is digital, but it is not machine-readable.
New 1099 thresholds from 2026
The One Big Beautiful Bill Act (July 2025) raised two reporting thresholds:
1099-NEC and 1099-MISC: filed when you pay a contractor $2,000 or more a year (previously $600). Applies to payments after December 31, 2025. Indexed for inflation from 2027.
1099-K: payment apps and marketplaces file it only for more than $20,000 in more than 200 transactions a year.
Fewer forms do not mean less tax. All business income is taxable, with or without a 1099. If you hire contractors, see our guide to W-9 and 1099 forms for small business owners.
One freelancer, two clients
Client A pays $1,800: no 1099-NEC, but the income goes on your tax return.
Client B pays $2,400: the client files a 1099-NEC.
Invoicing the federal government
Invoices: most federal agencies take invoices through their own electronic portals, not by mail or email.
Payments: under Executive Order 14247, the Treasury stopped issuing paper checks, including vendor payments, on September 30, 2025.
Federal customers now pay electronically, part of a wider shift in how invoices are paid.
Invoicing a federal agency?
Check that the agency has your current bank details. A paper check is no longer the fallback.
Business-to-business: voluntary e-invoicing
Between companies, e-invoicing is a market choice, not a legal duty.
A voluntary network, built with support from the Federal Reserve and modeled on Europe's Peppol, has been running since late 2023.
Large customers may ask you to use their supplier portal or a structured file format.
Unlike in many EU countries, invoices are not reported to the IRS in real time.
Is a mandate coming?
No federal or state law requires B2B e-invoicing, and no timeline has been announced.
How to prepare: 5 steps
Invoice with software, not a word processor. Numbering, dates and customer data stay consistent.
Get a W-9 before paying any contractor. Small invoices can add up to $2,000 by December.
Record how each invoice was paid. Card and app payments fall under 1099-K, bank transfers and checks under 1099-NEC.
Offer electronic payment. Put bank details or a payment link on every invoice.
Ask large customers about their portal, file format and PO number before the first invoice.
One record per invoice
Save each invoice with its payment date and method. Matching your books to 1099 forms at tax time then takes minutes.
FAQ:
Is e-invoicing mandatory in the US?
No. There is no federal or state requirement for B2B e-invoicing. PDF and paper invoices remain valid. Federal agencies usually require invoices through their own electronic systems.
What is the 1099-NEC threshold for 2026?
For payments made after December 31, 2025, you file a Form 1099-NEC when you pay a contractor $2,000 or more in a year. The threshold is adjusted for inflation from 2027.
When do payment apps send a Form 1099-K?
Only when a payee receives more than $20,000 in more than 200 transactions during the calendar year.
Do I pay tax on income not reported on a 1099?
Yes. All business income is taxable, even without a Form 1099. Keep your invoices and payment records as proof.
Does the federal government still pay vendors by check?
Generally no. The Treasury stopped issuing paper checks, including vendor payments, on September 30, 2025, with limited exceptions.
