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1099 Check-in
It’s tax time and 2011’s profitable players should be receiving their forms from sites. I got my DraftStreet form today.
Anyway, the purpose of this thread is twofold:
1) Please post if you’ve received a 1099 from any site not already covered. That way, if you think you should have received a form from a site, you know whether you should contact support or keep waiting. I’d encourage site reps to post when 1099s were/will be mailed.
2) Please post which box on the face of the form your profits are listed. DraftStreet used box 7 (Non-Employee Compensation) even though I would have expected box 3 (Other Income). I’m curious as to how various sites reported income so that I can update the tax article with more site-specific info and further customize the tax reporting section for players to complete their taxes. And yes, there is potentially a difference in how you complete your taxes depending on how the 1099s were completed and reported to the IRS.
Thanks for your help, guys.
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on 5/2/12
I got mine from Daily Joust yesterday. The earnings are listed in box 3 (other income)
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on 5/2/12
We sent them out to anyone that cashed out $600 more than they deposited on Draftday. I believe we used the other income box.
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on 5/2/12
Is there a definitive rate that we are paying on our winnings?
There was chatter in the FanDuel chat about 30% of profit.
Can anyone speak to this?
(I haven’t received any of my 1099 forms yet, but I imagine that I will be getting them from both FanDuel & Draftstreet this week)
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on 5/2/12
@kcearnal said…
Is there a definitive rate that we are paying on our winnings?
There was chatter in the FanDuel chat about 30% of profit.
Can anyone speak to this?
(I havenβt received any of my 1099 forms yet, but I imagine that I will be getting them from both FanDuel & Draftstreet this week)
I believe, and I’m taking this from poker, different states handle it different ways. Some states don’t even allow you to deduct losses.
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on 5/2/12
@jimfred82 said…
yet another great reason to be a small-stakes player! :)
This is why I purposely make sure to blow it all during the last 2 weeks of the regular football season.
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on 5/2/12
@kcearnal said…
Is there a definitive rate that we are paying on our winnings?
There was chatter in the FanDuel chat about 30% of profit.
Can anyone speak to this?
(I havenβt received any of my 1099 forms yet, but I imagine that I will be getting them from both FanDuel & Draftstreet this week)
At the federal level you will pay tax on your net winnings at your marginal tax rate. So, it really depends on your tax bracket, but generally 25% is about right for most in the middle class. State taxation varies depending where you live, but most states start with federal taxable income as their basis for calculating tax liability. I’m guessing 7% is about the average state tax rate, so 30-35% is probably reasonably accurate for most. That said, it varies by individual.
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on 6/2/12
I received one from the now defunct Fanball and they used box #3.
I read your article that was on the front page and I guess I go with using one of the two publications you listed. I was only doing the season long fantasy football on their site and I was in multiple leagues and I did not win every league. From what I can surmise on your write up I can count the leagues I was in and lost as a loss. I know this is a obvious statement, but it just looks odd the amount they sent as income. The reason is lets say for example they sent me $200 as income, but maybe I spent $150 to get in the various leagues. Therefore profit is $50.00. I know the Fanball stuff was a joke over the course of last year and from what I can remember I think other guys here had problems with how they counted winnings going to the tax man.
Anyone else around here have any advice on how they dealt with the Fanball/Snapdraft stuff in the past.
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on 6/2/12
Here is a situation I just came upon. This year paypal is sending a 1099-K if you go over $20,000 in transactions.
I use that particular paypal account for both my business and my daily fantasy (mistake I know), and now I’m getting 1099 from the daily sites and paypal.
How do I deal with that come tax time. Last thing I want to do is pay taxes twice on that money.
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on 6/2/12
@db730 said…
Here is a situation I just came upon. This year paypal is sending a 1099-K if you go over $20,000 in transactions.
I use that particular paypal account for both my business and my daily fantasy (mistake I know), and now Iβm getting 1099 from the daily sites and paypal.
How do I deal with that come tax time. Last thing I want to do is pay taxes twice on that money.
Oh, man. That sucks Dan. I don’t have the answers but I think you would be able to itemize everything somehow?
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on 7/2/12
@db730 said…
Here is a situation I just came upon. This year paypal is sending a 1099-K if you go over $20,000 in transactions.
I use that particular paypal account for both my business and my daily fantasy (mistake I know), and now Iβm getting 1099 from the daily sites and paypal.
How do I deal with that come tax time. Last thing I want to do is pay taxes twice on that money.
The 1099-K is a new form for 2011 tax reporting and I’m not all that familiar with it. The intent was to ensure greater compliance in tax reporting for those that receive frequent payments through payment networks (Visa/MC, e.g.). Think of the guy running his eBay store where he sells 10,000 homemade fishing lures at $2 each. Previously, there would be no IRS record of his 10,000 different $2 transactions, leaving plenty of room for income to be under reported.
I think the best thing you can do at this point is to call the IRS. Yeah, the hold times frequently suck, but they are usually really helpful. I would explain to them that a significant portion of your 1099 income is being double-reported on forms 1099-MISC and 1099-K. That is, your income is being reported by both the payment originator (DailyJoust) and by the payment network (Paypal). Clearly you shouldn’t (and won’t) pay taxes on the same earnings twice and the IRS can best advise you on how to report the amounts to cover your bases.
If I was to guess, you’re probably going to be pushed toward the schedule C route where in the eyes of the IRS, your DFS play looks like a business. That’s the “more aggressive” route I discussed in the article/podcast, but it this situation, it’s probably the appropriate route.
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on 8/2/12
Does anyone know if Draftstreet will still send me my 1099 if I withdrew through paypal? Or will I get a 1099k instead?
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on 8/2/12
Pretty sure paypal sends the 1099K and you won’t get that unless you have 20K in transactions through paypal.
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on 8/2/12
Thanks… I contacted DS and paypal, and DS isn’t sending me one because I withdrew through paypal and paypal isn’t either because I’m under their limits. Shouldn’t DS still send me the form regardless of how I withdrew?
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on 8/2/12
@atown01 said…
Thanksβ¦ I contacted DS and paypal, and DS isnβt sending me one because I withdrew through paypal and paypal isnβt either because Iβm under their limits. Shouldnβt DS still send me the form regardless of how I withdrew?
I withdrew through paypal on DraftStreet and received a 1099-MISC. I’m assuming you didn’t receive a 1099 because either 1) Your withdrawals less deposits in 2011 amounted to less than $600 or 2) DraftStreet missed it.
The method of withdrawal shouldn’t impact 1099 triggers.
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