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$5,800 vs $1,200: IRS May Raise Jackpot Tax Threshold, Impacting Gamblers and Casinos – Check Out!

IRS to Raise Gambling Jackpot Tax Threshold from $1,200 to $5,800

IRS Proposal to Replace Outdated $1,200 Rule Benefits Gamblers and Casinos

According to the report of Las Vegas Review-Journal, the IRS may soon raise the jackpot tax threshold on gambling jackpots from $1,200 to $5,800. The change on jackpot tax threshold would significantly affect casino gamblers and the casinos themselves. Currently when a player wins $1,200 or more on a slot machine the machine stops and the player must wait for a casino attendant. The attendant collects the player’s information and issues a W-2G form which reports the win to the IRS. This process is frustrating and time-consuming for players as they have to stay by the machine until the attendant arrives which can take a long time. Casinos also dislike this rule because it requires extra labor to handle the paperwork.

The $1,200 limit has been in place since 1977 and many argue that it is outdated. Due to inflation the value of $1,200 in 1977 is equivalent to about $6,200 today. As a result, the number of reportable jackpots has increased leading to more tax burdens for winners and additional compliance work for casinos. U.S. Representatives Dina Titus from Nevada and Guy Reschenthaler from Pennsylvania have been advocating for a change on the jackpot tax threshold. They believe that raising the jackpot tax threshold would reduce unnecessary red tape and support economic growth by making it easier for casinos to operate and for players to enjoy their winnings without immediate tax concerns.

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$5,800 vs $1,200: IRS May Raise Jackpot Tax Threshold, Impacting Gamblers and Casinos – Check Out! (PHOTO: Gambling Insider)

IRS Advisory Council Recommends Raising Jackpot Tax Threshold to $5,800

Furthermore, the IRS Advisory Council has recommended raising jackpot tax threshold to $5,800 and IRS Commissioner Danny Werfel has expressed support for the idea. He noted that getting input from taxpayers and the Advisory Council is valuable and that updating thresholds that are out of date is important. However, the final decision rests with the Treasury’s Office. This proposed change has been welcomed by many in the gambling community. Players would have fewer interruptions during their gaming experience and casinos could operate more efficiently. It would also reduce the number of W-2G forms issued making the process less cumbersome for both parties. Overall, increasing the jackpot tax threshold to $5,800 would reflect the impact of inflation and modernize an outdated rule benefiting both players and casinos. If approved this change could be a significant improvement for the gambling industry reducing hassle and improving the overall experience for everyone involved.

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