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Why $1200 for w-2?

Discussion in 'Misc. Vegas Chat' started by jwkick, Jan 2, 2016.

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  1. jwkick

    jwkick Tourist

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    I am sure this has been asked before but why? I can understand if you play pennies and hit big jackpot, but if you playing dollars it does not seem fair? It seems to me it is about time to raise the amount you need for getting a w-2. but to what?

    Does the IRS set the amount for the w-2? I know the IRS ALWAYS WANTS AS MUCH MONEY AS POSSIBLE from EVERYBODY! Is it set by the casinos? I just do not know so I am asking. Since it is a new year lets get a new number. It will probably never happen but I can always dream.
     
  2. jpw711

    jpw711 VIP Whale

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    it's set by the IRS and there was talk of lowering it last year to $600.
     
  3. Sonya

    Sonya Queen of VMB

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    Yeah, don't ask for a new number, because they'll just make it lower. :wink2:
     
  4. npom

    npom High-Roller

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    It's 600 on lottery and horse racing in NY.
     
  5. BreakEven

    BreakEven Low-Roller

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    Link to recent discussions on the limit possibly changing:
    http://www.vegasmessageboard.com/forums/showthread.php?117637-IRS-proposes-lowering-W2G-level-to-600
    http://www.vegasmessageboard.com/forums/showthread.php?120570-IRS-Accepting-Comments-Regarding-Lowering-W-2-Threshold-to-600

    And here you can read some of the comments people submitted at the time:
    http://www.regulations.gov/#!docketDetail;D=IRS-2015-0006

    I wasn't able to track down the history on when the W2G requirement originally went into effect. Found an article that suggested it was back in the 60's or 70's, but no proof.
     
    Only 2nd trip for year :(
  6. nostresshere

    nostresshere Mr. Anti Debit Card

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    Along with the threads above, this topic comes up often in the GAMING section.
     
  7. shifter

    shifter Degenerate Gambler

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    Because when it was set at that level that could buy you a nice car.

    So it was an actual jackpot.
     
  8. Auggie

    Auggie Dovahkiin

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    The problem here is: you are looking at it from the wrong angle.

    I know what you are trying to say, something along the lines of: "Back in the 60s and 70s a win of $1200 was pretty significant and I can see why they set that as the limit, but since then we've seen the invention of multi line video slots where you can easily bet $5-10 or more per spin and there are more high limit slots on the casino floor... as time ticks on they should raise the limit: just by inflation people make more money today than they did 40-50 years ago and $1200 today doesn't represent the same as it did back then."

    And that is totally true, however the mistake you are making is: The $1200 limit isn't the point where you have to pay taxes on winnings... the $1200 limit is set as where a paper trail is created to make sure people declare taxable winnings.

    Thats why there was talk last year about lowering the limit to $600 - if you go to the casino one night and win a couple of bucks you are supposed to declare it and pay taxes on it as income. However, they know that the vast majority of people aren't doing that so thats why the talk about lowering the threshold for when a W-2 is issued: the lower the limit then the more paper trails that get created and thus more people that are forced to declare gambling winnings.

    It makes sense to the people that the number should go up over time, but to the IRS moving the number up means less taxes they collect and so its most likely the number will just stay the same and if it ever were to change for it to go down instead of up.
     
  9. 44inarow

    44inarow VIP Whale

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    Cannot emphasize this enough. Hell, when you bet $25 on a hand of blackjack, and win, that $25 win is technically taxable income. It can be offset by the next $25 hand that you lose, but it's all income.

    I'll also add that the talk about lowering it to $600 was, I believe, coupled with a proposal to make it so that only a net session win of $600 would be reportable, which overall would probably have been good for the average gambler.

    That's another part of the IRS rule. $1200 is only for slot machines; for most other wagers, it's $600 and more than a 300:1 payout. So that's going to be most <$600 lottery payouts, but for horse racing, it's going to depend on what the odds were and the particular bet made.
     
  10. merlin

    merlin VIP Whale

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    The number($1200) is set by the govt, there is nothing you can do about it, it may in fact be lowered. The fact that it is illogical and unfair is something that no one can change either.
     
  11. FullPay

    FullPay High-Roller

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    The odds on horse racing are taken into account because of the jackpot mentality. If I win six hundred dollars on a two hundred dollar wager I can probably pay my taxes on April 15. If I win six hundred dollars on a two dollar wager I might forget to put that tax money aside, so the government protects me by taking the taxes today. They are just looking out for your best interests, don't ask for more help.
     
  12. merlin

    merlin VIP Whale

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    Tongue in cheek, but keep in mind you are in no way required to have taxes withheld by the casino, if you want every dime just say so.
     
  13. FullPay

    FullPay High-Roller

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    I haven't hit it, but I am pretty sure Churchill Downs takes the money. Either way, you sign that the income will be reported.
     
  14. merlin

    merlin VIP Whale

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    I've got plenty of w2-g's(well, not plenty), but I can assure you , you can get all the money, you dont sign promising anything, it's reported and you'll have to put it on your taxes(you can deduct it later obviously).
     
  15. LV_Bound

    LV_Bound VIP Whale

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    It is interesting how things get updated and some things never do.
    Based on the replies here it appears the $1,200 amount was set a long time ago and never adjusted.
    The government also has a $200 tax stamp fee that was set in the 1920s-1930s and has never changed yet other tax related stuff changes yearly.
    It just goes to show that no one can make sense of the weirdness that goes on in the government.

    I agree that if you push this topic too much they will lower the amount.
     
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