BANKROLL FORUM

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  • rotokevin

    2014 RG Bowling Co-Champion, CPA & DFS Tax Guru

    • 2014 FanDuel WFBC Finalist

    DFS and Taxes

    Hey gang. We’ve had a lot of tax discussion in the forums lately, but I’m super excited to announce that there is now a Taxes in Daily Fantasy lesson available in GrindersU.

    The article is comprehensive and covers most common tax-related questions we’ve discussed. Of course, no article can cover everything, so I’ll monitor this thread to answer additional questions.

    To make this thread useful, let’s strive to keep it on topic and not simply regurgitate the content of the lesson. Also, please scan the thread to make sure your question hasn’t already been answered. Following these simple guidelines will make the experience better for everyone.

    So, with that, let’s talk taxes.

    • Link
    • Last Updated 1 year ago
  • rotokevin

    2014 RG Bowling Co-Champion, CPA & DFS Tax Guru

    • 2014 FanDuel WFBC Finalist

    I know there are a lot of people who do this professionally. I do this all year but I’m more of a 10-20 dollar per day kind of guy during baseball and hockey. I turn it up during football because that’s what i’ve had most success with. I received the 1099 from DS. I understand I can deduct like the incentives I pay for here at rotog and etc. I also understand my internet can be deducted. From what I understand if my Internet is say 29.95 a month, I can’t fully deduct all of that since I partly use the internet for DFS, AND for personal use. If I say use it for 2 of 7 days on average for DFS, would I have to do it proportionally, or am I able to deduct all 29.95? My 1099 is under 1000 dollars.

    The expense portion gets a little dicey. On a shared expense like internet, some will take the stance that without the internet, you couldn’t play DFS, therefore deduct the whole amount. Other approaches will be to allocate the expense to DFS based on the amount of time the resource is used for DFS.

    That’s probably not the most helpful answer, but it depends on what stance you are comfortable with.

  • nes12cjl

    Hey Roto,

    This is my first 1099 form year first profit haha. I need advice on what to do i cashed a ticket from statclash
  • rotokevin

    2014 RG Bowling Co-Champion, CPA & DFS Tax Guru

    • 2014 FanDuel WFBC Finalist

    @nes12cjl said…

    Hey Roto,

    This is my first 1099 form year first profit haha. I need advice on what to do i cashed a ticket from statclash

    I’m sorry, I don’t understand what the question is. Could you provide a bit more background and what you would like to know?

  • deactivated17417

    I got my 1099 today. What should I do if it is $620 more than it is supposed to be?

  • rotokevin

    2014 RG Bowling Co-Champion, CPA & DFS Tax Guru

    • 2014 FanDuel WFBC Finalist

    @TheCoz said…

    I got my 1099 today. What should I do if it is $620 more than it is supposed to be?

    Contact the site and request a reconciliation of the amount and/or a corrected 1099 if necessary. I worked with a site last year for a couple of weeks to resolve a 1099 issue (the amount and my tax ID number were incorrect).

  • deactivated17417

    Yup nevermind. I’m an idiot and didnt include January from the previous NFL season in my bookkeeping. Im banning myself from posting for a week. FD customer service was outstanding once again.

  • nes12cjl

    Hey kevin

    Do you have a site that has tax form info, regarding 1099. Im completely lost this is my first profit year.

  • rotokevin

    2014 RG Bowling Co-Champion, CPA & DFS Tax Guru

    • 2014 FanDuel WFBC Finalist

    @nes12cjl said…

    Hey kevin

    Do you have a site that has tax form info, regarding 1099. Im completely lost this is my first profit year.

    Here is a comprehensive overview: /lessons/Taxes_in_Daily_Fantasy_Sports-219602

  • Battery1975

    This might be a stupid question but do winnings on freerolls count toward profitability on a 1099? Received my 1099 but its about 1200 less than what I calculated for the year in profits. But I did win about 1200 on freerolls for the year so wondering if maybe that doesn’t count.

  • Stewburtx8

    • 2012 FanDuel WFBC Finalist

    @Battery1975 said…

    This might be a stupid question but do winnings on freerolls count toward profitability on a 1099? Received my 1099 but its about 1200 less than what I calculated for the year in profits. But I did win about 1200 on freerolls for the year so wondering if maybe that doesn’t count.

    Winnings from freerolls should be included in your 1099.

  • rotokevin

    2014 RG Bowling Co-Champion, CPA & DFS Tax Guru

    • 2014 FanDuel WFBC Finalist

    @Battery1975 said…

    This might be a stupid question but do winnings on freerolls count toward profitability on a 1099? Received my 1099 but its about 1200 less than what I calculated for the year in profits. But I did win about 1200 on freerolls for the year so wondering if maybe that doesn’t count.

    What Stew said. Also, you had $1200 in winnings from freerolls?!? That’s mighty fine work, sir.

  • Battery1975

    @rotokevin said…

    What Stew said. Also, you had $1200 in winnings from freerolls?!? That’s mighty fine work, sir.

    Thanks, I thought so. Maybe I need to redo my calculations for the year. Yea I had a really good weekend in the NFL and won the gold, silver, bronze and the facebook freeroll.

  • bklucky13

    I am still waiting for my Fanduel tax form, if there is a fanduel rep reading this can they estimate when forms will go out?

  • rotokevin

    2014 RG Bowling Co-Champion, CPA & DFS Tax Guru

    • 2014 FanDuel WFBC Finalist

    @bklucky13 said…

    I am still waiting for my Fanduel tax form, if there is a fanduel rep reading this can they estimate when forms will go out?

    Contact FanDuel support. They can tell you when your form was sent and may be able to provide a pdf copy. Your form was likely mailed last Friday and given the weather around the country, mail delivery is likely a day or two behind. I’d expect it to arrive early next week.

  • bklucky13

    Thanks…I am a mailman and can understand the delay

  • Jameson12

    Kevin…
    what is the easiest way to write off DFS winnings since it is sent as a 1099 and not a WG2 as you would be sent for “gambling” winnings?

    And i mean this in that they have and area for you to specifically write off gambling lossses but not with DFS because it is a 1099

  • rotokevin

    2014 RG Bowling Co-Champion, CPA & DFS Tax Guru

    • 2014 FanDuel WFBC Finalist

    @Jameson12 said…

    Kevin…
    what is the easiest way to write off DFS winnings since it is sent as a 1099 and not a WG2 as you would be sent for “gambling” winnings?

    And i mean this in that they have and area for you to specifically write off gambling lossses but not with DFS because it is a 1099

    Either on schedule A as “other miscellaneous itemized deductions” or as a business expense on schedule C.

  • Jameson12

    Thanks for the answer Kevin

  • mongoman

    I would think the Schedule C would work for a lot of players with smaller wins and a loss or two on other sites. While the self-employment tax is 15.3%, half of it is deductible from other income even if one doesn’t itemize. And, the SE tax only kicks in on income over $400. So, for example, a $600 FD 1099 coupled with a DK loss of $225 would result in no SE tax and taxable income of $375. Plus, as others have said, there are deductions that can be utilized to bring that win total down even more. Depending on how much your winning 1099 was and how aggressive you are writing off any DFS expense, one could keep their win to under $400.

  • Stewburtx8

    • 2012 FanDuel WFBC Finalist

    @mongoman said…

    I would think the Schedule C would work for a lot of players with smaller wins and a loss or two on other sites. While the self-employment tax is 15.3%, half of it is deductible from other income even if one doesn’t itemize. And, the SE tax only kicks in on income over $400. So, for example, a $600 FD 1099 coupled with a DK loss of $225 would result in no SE tax and taxable income of $375. Plus, as others have said, there are deductions that can be utilized to bring that win total down even more. Depending on how much your winning 1099 was and how aggressive you are writing off any DFS expense, one could keep their win to under $400.

    Just remember that the IRS probably isn’t going to want to see you try to go back and forth using Schedule C for smaller profits to using Line 21/Other Income in following years. So while using Schedule C in the present may be beneficial for “smaller profits”, if you would hit a bigger score or profit in subsequent years, you will likely need to still file a Schedule C and pay SE tax. Just something to keep in mind.

  • mongoman

    @Stewburtx8 said…

    Just remember that the IRS probably isn’t going to want to see you try to go back and forth using Schedule C for smaller profits to using Line 21/Other Income in following years. So while using Schedule C in the present may be beneficial for “smaller profits”, if you would hit a bigger score or profit in subsequent years, you will likely need to still file a Schedule C and pay SE tax. Just something to keep in mind.

    Good point. I guess the real deciding factor would be what one’s tax bracket is and the size of their other site loss. Well, that and the likelihood of hitting it big in subsequent years.

  • ChaosM83

    • 608

      RG Overall Ranking

    I should have received a 1099 from Daily Joust, but still haven’t. I cashed in the tournament as they were closing, I can’t remember exactly how much it would have been for. How should I handle this if I don’t get a 1099 with the details?

  • rotokevin

    2014 RG Bowling Co-Champion, CPA & DFS Tax Guru

    • 2014 FanDuel WFBC Finalist

    @ChaosM83 said…

    I should have received a 1099 from Daily Joust, but still haven’t. I cashed in the tournament as they were closing, I can’t remember exactly how much it would have been for. How should I handle this if I don’t get a 1099 with the details?

    Two approaches:

    Aggressive – No 1099, no taxes. Without documentation of earnings, many people elect not to claim them at all.

    Conservative – file with your best estimate as to the earnings.

    Best course of action – attempt to contact Joust (support@dailyjoust.com might still work). If they have no record of you needing to receive a 1099, proceed using one of the above methods. The worst case would be to take the aggressive route above only to have had your 1099 get lost in the mail, which will trigger a letter from the IRS and taxes owed. Best to confirm whether or not a 1099 exists before making any decisions.

  • LawnStar

    Kev,

    How exactly do you suggest declaring losses on sites like FD & DK to offset some winnings on say DS? I understand if you are considering this a business then you would typically file this under misc. expenses, sure. But how do you list these?

    Deposits resulting in a loss to FanDuel (with amount)
    Deposits resulting in a loss to DraftKings (with
    amount).

    ??

    What do you suggest?

  • rotokevin

    2014 RG Bowling Co-Champion, CPA & DFS Tax Guru

    • 2014 FanDuel WFBC Finalist

    @LawnStar said…

    Kev,

    How exactly do you suggest declaring losses on sites like FD & DK to offset some winnings on say DS? I understand if you are considering this a business then you would typically file this under misc. expenses, sure. But how do you list these?

    Deposits resulting in a loss to FanDuel (with amount)
    Deposits resulting in a loss to DraftKings (with
    amount).

    ??

    What do you suggest?

    When filing on schedule C, I have used “contest entry fees” as the description for deducting losses. Remember, the IRS doesn’t have the sophisticated knowledge of this space that those of us at RG have. The language you propose is probably more “correct,” but sounds more like capital gain/loss language to the IRS. Claiming winnings from fantasy sports should logically have entry fees, so that is my preferred description. I’ve filed returns that way for the past 2 years with no noise from the IRS.

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