INDUSTRY FORUM

Comments

  • Vegasken

    Lesson I learned and the hope that others can learn from my mistake since we are nearing the end of the year —- Last year (2015) I had a very good DFS baseball season. At one point in September, I won a couple tournaments ($27 and the $9), and finished 2nd in a high-dollar tourney ($1060 – after winning a ticket to this tourney). I withdrew some, but not all of the money because I mistakenly had thought I would receive a 1099 for the amount of the withdrawal minus the deposits I had made – in 2015. I thought I would withdraw some in 2015, and some in 2016 – thus splitting the taxes owed over 2 years……WRONG!

    After DK had first credited back my deposits, I was sent a certified check (around $50k). I put a chunk into savings to pay what I had thought my taxes were going to be for 2015, I paid down debt, and the wife and kids had a really good X-mas.

    After January 1, 2016 – I went against all lessons in bankroll management, and was thinking I should play higher-dollar buy-ins. I was playing in $300/$333 tourneys when I had no business playing in those. The only time I would have been in those was if I had won a ticket to them. Took me all of about a couple weeks to run through the bankroll I had left in my account after withdrawing back in Sept of 2015.

    No worries, right? I still had the money set aside for what I had thought was going to be enough for the taxes that I would owe. Fast forward to when I got the 1099 from DK —- the amount on the 1099 is actually your NET WINNINGS for the calendar year – yikes! Not the amount of the withdrawal minus the amount of the deposits in the given calendar year. No worries, right? I still had the rest of the money in my DK account since I used proper bankroll management and didn’t stray from my comfort zone — OOOOPS!

    This mistake is from a guy with an MBA in Finance….stupid mistake…..I know tons of tax guys and instead of asking them for advice, I made a huge mistake!

    Lesson of my story – don’t get caught up thinking you know everything and jump out of your comfort zone. Proper bankroll management doesn’t guarantee success, but it sure helps to lessen the blow when that cold streak hits……

  • DomTwan

    So, hope to go on a losing streak towards the end of the calendar year, and then smash in January is what you are saying?

  • DomTwan

    Can losses in the stock market in the same calendar year offset gains made in DFS in the same calendar year?

  • Brandon23

    This is good stuff, although I knew the net winnings piece it is always good to read others’ experiences. Do any tax guys have some advice on deductions? I’ve read a lot about it through the internet and a tax article that was written on here a while back, but still don’t have a great grasp on it. I recently bought a lap top (mainly for DFS purposes) can this be written off as a deduction? And does that money come straight off of net winnings? Say for example I have $5000 this year in net winnings and spend $1000 on a lap top, would they tax that as $4000?

    This is probably a silly question, but I have very little knowledge of how taxes work being fresh out of college.

  • squirrelpatrol

    • 29

      RG Overall Ranking

    • Ranked #24

      RG Tiered Ranking

    • 2019 DraftKings FBWC Finalist

    • x2

      2020 DraftKings FBBWC Finalist

    @Brandon23 said...

    This is good stuff, although I knew the net winnings piece it is always good to read others’ experiences. Do any tax guys have some advice on deductions? I’ve read a lot about it through the internet and a tax article that was written on here a while back, but still don’t have a great grasp on it. I recently bought a lap top (mainly for DFS purposes) can this be written off as a deduction? And does that money come straight off of net winnings? Say for example I have $5000 this year in net winnings and spend $1000 on a lap top, would they tax that as $4000?

    This is probably a silly question, but I have very little knowledge of how taxes work being fresh out of college.

    I’m not an accountant, but I am a guy who has hired an accountant to help work through some DFS issues. I believe that anything spent solely towards playing DFS can be used as a deduction from DFS winnings. My understanding (again, I’m not an accountant) is that in the example you gave, if you have $5000 in winnings, and then spend $1000 on a laptop, you have to make some kind of estimate as to what percentage of the laptop is used for DFS, and that is your deduction. So you would state that you estimate you use the laptop 50% for DFS, 50% for personal use, and deduct $500. At least that’s how it’s used for deducting my home internet charge, now that I think about it property may be different because there is depreciation involved.

  • DomTwan

    @squirrelpatrol said...

    I believe that anything spent solely towards playing DFS can be used as a deduction from DFS winnings.

    I think this only applies if you are filing your taxes as a professional gambler, but correct me if I am wrong.

    If DFS is simply a hobby/not your main source of income, I don’t think you can write off things like a laptop?

  • Brandon23

    @DomTwan said...

    I think this only applies if you are filing your taxes as a professional gambler, but correct me if I am wrong.

    If DFS is simply a hobby/not your main source of income, I don’t think you can write off things like a laptop?

    That seems silly to me if DFS is an additional source of income. If a laptop is used to improve your ROI, it should be able to be used as a deduction – as long as it was purchased for DFS. I don’t make the rules though.

  • tianyihe

    @DomTwan said...

    Can losses in the stock market in the same calendar year offset gains made in DFS in the same calendar year?

    No it cannot. Losses in stock market can only carry forward against capital gains in the future.

  • einars

    @Brandon23 said...

    That seems silly to me if DFS is an additional source of income. If a laptop is used to improve your ROI, it should be able to be used as a deduction – as long as it was purchased for DFS. I don’t make the rules though.

    the only way you get a deduction is if its a business exp. This is why you can only take a deduction if you are claiming DFS is your livelihood. for the vast majority of people this is a hobby and will be “other income”. this means you nets your winnings with your entry fees (regardless of what is withdrawn) and pay taxes on that. no deductions unless its your profession

  • tianyihe

    @squirrelpatrol said...

    I’m not an accountant, but I am a guy who has hired an accountant to help work through some DFS issues. I believe that anything spent solely towards playing DFS can be used as a deduction from DFS winnings. My understanding (again, I’m not an accountant) is that in the example you gave, if you have $5000 in winnings, and then spend $1000 on a laptop, you have to make some kind of estimate as to what percentage of the laptop is used for DFS, and that is your deduction. So you would state that you estimate you use the laptop 50% for DFS, 50% for personal use, and deduct $500. At least that’s how it’s used for deducting my home internet charge, now that I think about it property may be different because there is depreciation involved.

    Do you play for a living and file as a professional gambler or self employed? Even for self employed, to deduct home internet charge is pretty aggressive and something I have not done.

  • Brandon23

    https://www.irs.com/articles/tax-tips-people-who-earn-income-hobby

    Found this article through the IRS website, I could very easily make a claim that this is technically a “business” I can fill all 9 of those factors that are considered a “business”. I see nothing about being considered a professional, and even if there was phrasing involving the word “professional” it would need to be defined. According to this article, I would be able to file my lap top as a deduction. I would be intending this as use for improving my profitability as my tablet just doesn’t do the trick anymore with the spreadsheets I use.

    Does anyone have any information that would show this article isn’t accurate? I know there is a tax-guru on this forum, but he has not shown up yet. Hoping he can throw in his two cents.

  • einars

    @Brandon23 said...

    https://www.irs.com/articles/tax-tips-people-who-earn-income-hobby

    Found this article through the IRS website, I could very easily make a claim that this is technically a “business” I can fill all 9 of those factors that are considered a “business”. I see nothing about being considered a professional, and even if there was phrasing involving the word “professional” it would need to be defined. According to this article, I would be able to file my lap top as a deduction. I would be intending this as use for improving my profitability as my tablet just doesn’t do the trick anymore with the spreadsheets I use.

    Does anyone have any information that would show this article isn’t accurate? I know there is a tax-guru on this forum, but he has not shown up yet. Hoping he can throw in his two cents.

    there are alot more hoops to jump through if you want to claim DFS as your profession. it is rarely worth it (even with the deductions) unless it really actually is your profession.

  • einars

    i know @pjguin123 is a pro in this area

  • Brandon23

    @einars said...

    i know @pjguin123 is a pro in this area

    That is the name I recall.. I guess what I’m not understanding is why it needs to be claimed as my only profession. It is one source of additional income – people run multiple businesses, some make more money than others. Why would there be additional hoops to jump through in claiming that I am using DFS as an additional source of income that I run with a business model? To grow that business I use proper bankroll management, spend hours daily on research, have developed a spreadsheet to improve ROI, and have shown steady ROI over an extended period of time.

  • Brandon23

    After a little more research, maybe I am looking at this the wrong way. What would be some hurdles in using itemized deductions if I claim DFS as a for-profit hobby? Would I be allowed to throw the lap top under itemized deductions?

  • PJGuin23

    DFS Tax Guru

    @Brandon23 said...

    That is the name I recall.. I guess what I’m not understanding is why it needs to be claimed as my only profession. It is one source of additional income – people run multiple businesses, some make more money than others. Why would there be additional hoops to jump through in claiming that I am using DFS as an additional source of income that I run with a business model? To grow that business I use proper bankroll management, spend hours daily on research, have developed a spreadsheet to improve ROI, and have shown steady ROI over an extended period of time.

    Feel free to PM me if you have anything specific

  • Stewburtx8

    • 2012 FanDuel WFBC Finalist

    @einars said...

    there are alot more hoops to jump through if you want to claim DFS as your profession. it is rarely worth it (even with the deductions) unless it really actually is your profession.

    THIS. Yes, you absolutely could claim DFS as a “business” even if you have a full-time job, but it most cases, it is not going to be beneficial to you from a tax perspective. If you file on Schedule C as a business, you will owe self-employment tax (additional 15.3% this year I believe). So unless you have significant amount of deductions (hard to fathom), it just does not make sense for most people.

    I know I personally have filed as a hobby/other income/line 21 of 1040 and got an audit letter from the IRS saying that I owed them self-employment tax and should have filed as a business. I wrote them a response letter and they eventually agreed that I was correct to file it as a hobby, but there are probably a lot of people that could/should file as a business when they are certainly not a pro.

    But everyone’s situation is different. As always, message PJGuin23 to discuss your specific situation.

  • Brandon23

    Appreciate the responses everyone!

  • PJGuin23

    DFS Tax Guru

    @Stewburtx8 said...

    THIS. Yes, you absolutely could claim DFS as a “business” even if you have a full-time job, but it most cases, it is not going to be beneficial to you from a tax perspective. If you file on Schedule C as a business, you will owe self-employment tax (additional 15.3% this year I believe). So unless you have significant amount of deductions (hard to fathom), it just does not make sense for most people.

    I know I personally have filed as a hobby/other income/line 21 of 1040 and got an audit letter from the IRS saying that I owed them self-employment tax and should have filed as a business. I wrote them a response letter and they eventually agreed that I was correct to file it as a hobby, but there are probably a lot of people that could/should file as a business when they are certainly not a pro.

    But everyone’s situation is different. As always, message PJGuin23 to discuss your specific situation.

    And there is a Revenue Ruling that says you may well HAVE to file as a business. I have criteria in place and a method determining which way to go. It’s not set in stone and every situation is unique. I’ve studied similar cases in other areas to determine the best course. CSV files and interviews are crucial.

  • Tammy409

    I didn’t have time to read thru all replies, but 1). Sorry for the hassle and 2). Are you saying that all “Winnings’ are taxable in full and that “Entry Fees” are not deductible against winnings? If so? That’s something I would never have guessed either. Fortunately (I guess), I’m not good enough. to have ever withrawn…

  • DomTwan

    If you have a full time job, and you get a form from DK, do you think the IRS would even audit you if you don’t claim your winnings? I pay so much fucking tax at my job I don’t wana give away half my DFS roll to these greedy fucks.

  • PJGuin23

    DFS Tax Guru

    @Tammy409 said...

    I didn’t have time to read thru all replies, but 1). Sorry for the hassle and 2). Are you saying that all “Winnings’ are taxable in full and that “Entry Fees” are not deductible against winnings? If so? That’s something I would never have guessed either. Fortunately (I guess), I’m not good enough. to have ever withrawn…

    Entry fees are netted on the 1099. As for other sites, it depends on how you file.

  • PJGuin23

    DFS Tax Guru

    @DomTwan said...

    If you have a full time job, and you get a form from DK, do you think the IRS would even audit you if you don’t claim your winnings? I pay so much fucking tax at my job I don’t wana give away half my DFS roll to these greedy fucks.

    Most likely you will get a CP2000 notice for unreported income, not an “audit” per se.

  • sethayates

    @PJGuin23 said...

    Most likely you will get a CP2000 notice for unreported income, not an “audit” per se.

    I got a CP2000 two years ago from a W2 for the first three days in January before I started a different job. I totally forgot about it. The amount was so small that the change resulted in me owing like $21 or something— and, yes, the IRS did want their $21.

  • DomTwan

    @PJGuin23 said...

    Most likely you will get a CP2000 notice for unreported income, not an “audit” per se.

    How much of my net winnings is good old uncle sam going to funnel into his account after it is all said and done? 35%? More? Any way to reduce this number?

  • Stewburtx8

    • 2012 FanDuel WFBC Finalist

    @DomTwan said...

    How much of my net winnings is good old uncle sam going to funnel into his account after it is all said and done? 35%? More? Any way to reduce this number?

    It depends on your own personal tax rate. DFS income will just get added to all of your other income and get taxed at whatever rate your income falls into. Then there is also state tax in many states….

  • X Unread Thread
  • X Thread with New Replies*
  • *Jumps to your first unread reply

Subforum Index

RotoGrinders.com is the home of the daily fantasy sports community. Our content, rankings, member blogs, promotions and forum discussion all cater to the players that like to create a new fantasy team every day of the week.

If you or someone you know has a gambling problem, crisis counseling and referral services can be accessed by calling 1-800-GAMBLER (1-800-426-2537) (IL). Gambling problem? Call 1-800-Gambler (NJ/WV/PA), 1-800-9-WITH-IT (IN), 1-800-522-4700 (CO) or 1-800-BETS OFF (IA). 21+. NJ/PA/WV/IN/IA/CO/IL only.