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  • mambaland

    I do not want to start a tax thread as they already are on here but my question is …with rake as high as it is that is a give..BUT how do you combat the near 40 percent tax at end of year..it seems you have a couple years where you lose then all of a sudden you win and taxes wipe that out and your still in the hole. anyone have any good strategies other than move to canada

  • Zieg30

    @tomac said...

    For example, lets say its 12/28 and you are up $1000 for the year. 40% of that to Uncle Sam brings your net down to $600, which also happens to be the threshold. You can put that $400 in play in a high dollar GPP – as long as losing gets you under the threshold.

    Basically, if you lose it, its not yours to begin with, and if you win, everybody gets more – you and Uncle Sam.

    There is no “under the threshold”. You still owe taxes on any net profit less than $600. The site may not provide that information to the IRS under those circumstances, but you’re still committing tax fraud if you don’t pay those taxes.

  • Zieg30

    @mambaland said...

    anyone have any good strategies other than move to canada

    Unfortunately, even that isn’t a good strategy.

    You’d have to move to Canada AND renounce your U.S. Citizenship.

  • thedude404

    • 2015 FanDuel NBA Playboy Mansion Finalist

    If you file as a self employed player and end up with a net loss (not very likely if you are playing DFS as a full time job), you can carry back that loss to I think up to the previous 5 years and get refunded.

    https://www.thebalancesmb.com/tax-loss-carryback-and-carry-forward-explained-398178

  • darko3131

    • 2016 DraftKings FFWC Finalist

    • 2019 DraftKings FBWC Finalist

    @dolphinkick182 said...

    How to not pay taxes on DFS winnings made simple. On December 31st do this:

    If that’s not for you, then pay what you owe or don’t play.

    Though there is always the chance you could get away with it. How many people can they actually audit? Guess it depends on the odds and risk vs reward. I take the simple approach and just pay up.

    The DFS sites issue 1099’s. Those 1099’s go to the IRS. There really isn’t much to try to get away with…or audit for that matter. For the casual player its simply a matter of reporting the 1099 income on the tax return. If you don’t there is a 99.99% chance you’ll receive a letter from the IRS letting you know they received a 1099 in your name that you forgot to report. They’ll demand the tax on that income and charge penalties and interest on top.

  • mambaland

    @thedude404 said...

    If you file as a self employed player and end up with a net loss (not very likely if you are playing DFS as a full time job), you can carry back that loss to I think up to the previous 5 years and get refunded.

    i would bet most self employed pro dfs lose money so maybe i should go pro

  • Trappist1

    @mambaland said...

    i would bet most self employed pro dfs lose money so maybe i should go pro

    Most self employed DFS pros are getting into content and touting behind paywalls that one can access with subscription. Also creating tools and optimizers that they can charge with. Instead of focusing too much on taxes, best to see what other ventures you can leverage DFS income. In short, they do not see DFS as the gravy train that will keep on rolling whether there is taxes or not. Take the income, pay the taxes and branch into other ventures. Hope that helps.

  • SkateFiend

    @Zieg30 said...

    There is no “under the threshold”. You still owe taxes on any net profit less than $600. The site may not provide that information to the IRS under those circumstances, but you’re still committing tax fraud if you don’t pay those taxes.

    Don’t you mean net profit over $600?

  • karimamin

    Can someone just clarify the new laws. Yes I should probably see a professional but here is a very simple example. (Not trying to beat the system)

    DFS Winnings = 100k
    DFS Losses = 20k
    Random Casino Winnings = 30k
    Random Casino Losses = 10k
    Travel to casino – 5k
    Food and Entertainment – 5k

    How much would I claim on my taxes? I assume my gross income was 100k from both dfs and casino winnings – losses but can I also deduct travel and food expenses related to my casino trip such that my net income is 90k? As to what status I would claim myself as (casual gambler or professional), I’d claim whatever nets me the most money of course. I do play every day so you could say it’s a business

  • mtdurham

    Relatively simple to avoid taxes if you do it full-time….deduct your expenses… then open a SEP IRA and plow 25% of your income into there so you dont pay taxes on that portion…then if you have losses the following year you can pull income out of the IRA to offset them.

    Also, you’ll want to save all your crowns until year end…. if you have losses cash them all in so you have untaxed winnings to get back clsoe to even… if you have big winnings that year just roll them over to the following year where you may have losses to offset. It’s a concept called “tax harvesting”

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