IRS Proposes Lower Tax Deduction from Gambling

IRS to lower tax deduction from gamblingTo reduce casual gambling, which can slowly turn into a habit and addiction, the IRS has proposed to lower the amount that would trigger tax on income earned from gambling. While earlier the minimum amount for taxes was at $1200 now it will be at $600 and winner has to report it on W2G, which has to be included in their annual tax returns. Previous limit of $1200 on wins from video poker and slots was set up by IRS in 1977, and since then it has not been reviewed. As the value of $ 1200 is now $ 4627 the IRS has proposed this change which makes it burdensome on both casinos and players.

 

Effect on players of slots and video poker

This will be detrimental to $1 slot machines as these require several coins for the three bonus jackpot to come through and any wild pays above $600 would trigger a tax form. With larger reel slots of five or ten would become worse and player would have to stop the game in between spins to file a form if they are moving forward on progressive wins. As for video poker player a royal flush on $.25, game which may bring on a win with games like Deuces Wild, Joker Poker or even Double Bonus would have to be reported.

 

Opposition from gaming industry

Casinos across Vegas, Florida, New Jersey and other locations that thrive on slot casinos are protesting against this law. Besides filling up the tiresome tax form, now the casinos will have to employ people and machines to keep track of players’ activities and hand out tax forms when required. The technical aspect will also bring in lesser tourists as they would not like to go through tax process. This limit of $600 on both video and slots has increased the paperwork required from each customer in the casino. Casinos in United States fear that if this continues than people from Canada will stop coming to United States to play these games and locals might travel to Vancouver for gambling.