While on vacation, Jennifer wins $15,875 at a Las Vegas casino. What percentage of her winnings will be withheld when collecting her prize?

When an individual wins a substantial amount of gambling winnings, the Internal Revenue Service (IRS) requires that a specific percentage be withheld for federal income tax purposes. In the case of gambling winnings, particularly those exceeding $5,000, the withholding rate is set at 24%. This is applicable regardless of the individual's tax bracket or overall income level when it comes to gambling prizes.

Therefore, for Jennifer's winnings of $15,875, the appropriate amount subject to withholding would be 24% of her winnings. This withholding ensures that taxpayers fulfill their tax obligations on gambling income, as it is considered taxable income. It's essential for winners to understand this withholding requirement to avoid complications when filing their income tax returns.