Proposed Increase in Reporting Thresholds and Changes to Wagering Loss Deductions
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This proposed rule increases the threshold for businesses to report certain payments from $600 to $2,000, starting from 2026. It also changes the deduction limit for gambling losses to 90% of such losses in a taxable year. These changes primarily affect businesses making payments and individuals claiming gambling deductions.
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Key Changes
- Increased reporting threshold to $2,000
- Gambling loss deduction limited to 90%
- Threshold adjustments for inflation from 2026
Obligations
What this law requires
Businesses engaged in trade or business must adjust their information reporting systems to comply with the increased reporting threshold for payments from $600 to $2,000 starting January 1, 2026.
Businesses must report certain payments exceeding $2,000 made in the course of their trade or business by filing appropriate information returns with the IRS.
Taxpayers claiming a deduction for wagering losses must ensure that such deductions do not exceed 90% of their wagering losses in a taxable year, as allowed by the revised regulation.
Businesses must adjust their information reporting practices to comply with the new $2,000 threshold as established by the amendments effective for payments made after December 31, 2025.
Individuals claiming deductions for wagering losses must ensure their deductions do not exceed 90% of their wagering losses within the taxable year, limited to the extent of gains from wagering transactions.