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  • PJGuin23

    DFS Tax Guru

    As some of you may or may not know, I am pleased to announce that I have an exclusive partnership with Rotogrinders to provide tax preparation and consulting services for the RG community. Good news is the 1099-MISC Forms are beginning to trickle in and I’m gladly accepting new clients. I am a CPA based out of suburban Philadelphia with a tax practice focusing on DFS, poker players and Horse Racing. I have years experience with the latter and that’s where I received most of my Hobby vs. Business Income experience. I can work with anyone throughout the United States and have very likely prepared your State and/or Local Tax returns.

    You can also ask basic questions on this thread I would be happy to answer. To remind you, more specific questions to your overall income and expenses situation may require a professional opinion from a tax preparer or CPA. Again, you can contact me for those services if you wish. If you currently have an accountant (common for Grinders with small businesses), I would be happy to corroborate with them to prepare an accurate return for you for DFS purposes.

    There are no significant changes for this season compared to last for DFS purposes. Buzzing around the new Administration is the possibility of major tax reform with potentially significant changes in tax rates, brackets and deductions. They have no effect for your 2016 tax return and not likely for your 2017 return (rarely are retroactive) but I have been monitoring the situation closely. As we have seen with legislation regarding DFS, there are multiple competing interests at work and “tax reform” could be minimal, if anything. I would wait and see until the law is codified and signed. If anything changes, your situation could vary greatly.

    My website is www.dailyfantasytaxes.com. You can contact me through there where I have a contact form and my toll free number or PM me on here

    PJGuin23’s Disclaimer: I am a Certified Public Accountant licensed by the Commonwealth of Pennsylvania. Any information provided is for informational purposes only and is not intended to substitute for obtaining accounting, tax, or financial advice from a professional accountant, CPA, lawyer or other competent financial professional. Presentation of information I provide on RotoGrinders does not constitute an accountant-client relationship. Such relationship can be established by engaging in professional services privately with PJGuin23. RotoGrinders readers are advised not to act upon information I provide without seeking the service of a professional accountant well versed in your particular situation.

  • kswetnam1342

    • 933

      RG Overall Ranking

      RG Overall Ranking

    What’s the best way to go about disputing my actual winnings and what DK sent on the 1099?

    The difference between the RG Analyzer and the 1099 is $5611.96.

    Also, I did win a seat to the MMA Bracket Challenge that is valued at $3125. I won the qualifier in 2016, but the event hasn’t taken place yet.

  • PJGuin23

    DFS Tax Guru

    @kswetnam1342 said...

    What’s the best way to go about disputing my actual winnings and what DK sent on the 1099?

    The difference between the RG Analyzer and the 1099 is $5611.96.

    Also, I did win a seat to the MMA Bracket Challenge that is valued at $3125. I won the qualifier in 2016, but the event hasn’t taken place yet.

    Not to be short, but contact their Customer Service and ask for an explanation.

  • dtrain187

    I’m using TurboTax and when I go to enter “other income” for my 1099-Misc, it asked me to categorize it with a bunch of different options. The only options that would remotely fit are “prize winnings” and “none of the above”. I’ve tried both options to see how it affects my return and for some reason I lose about $300 of my return if a choose “none of the above”, as opposed to “prize winnings”. Does this seem odd? Why would “prize winnings” be taxed less than whatever it thinks “none of the above” is? Unless someone strongly says otherwise, I’m choosing “prize winnings”.

    Edit: not sure if it matters, but it’s about $5K total between two different sites.

  • PJGuin23

    DFS Tax Guru

    @dtrain187 said...

    I’m using TurboTax and when I go to enter “other income” for my 1099-Misc, it asked me to categorize it with a bunch of different options. The only options that would remotely fit are “prize winnings” and “none of the above”. I’ve tried both options to see how it affects my return and for some reason I lose about $300 of my return if a choose “none of the above”, as opposed to “prize winnings”. Does this seem odd? Why would “prize winnings” be taxed less than whatever it thinks “none of the above” is? Unless someone strongly says otherwise, I’m choosing “prize winnings”.

    Edit: not sure if it matters, but it’s about $5K total between two different sites.

    Possibly if not classified as Prize Winnings it gets viewed as Self Employment Taxes. I don’t use TurboTax.

  • dtrain187

    @PJGuin23 said...

    Possibly if not classified as Prize Winnings it gets viewed as Self Employment Taxes. I don’t use TurboTax.

    That makes some sense. Thanks for your reply.

  • PJGuin23

    DFS Tax Guru

    @dtrain187 said...

    That makes some sense. Thanks for your reply.

    No problem!

  • DoubleTime

    • 2016 King of Summer: August

      King of Summer: August

    PJGuin23,

    Last year I used TurboTax, just looking back over what they did now, it looks like it did a Schedule C-EZ and appears on line 12 of Income (so guess that means I paid self-employment tax?)

    I read somewhere I’d be better off just listing it on line 21 as Other Income and putting Hobby DFS.

    It was only around $1,000 last year so I wasn’t too concerned. This year it is about $10,000 so I am wondering, would I be better off putting it on line 21 as Other Income? I have a normal job with income reported on a W2 as well if that matters.

  • PJGuin23

    DFS Tax Guru

    @DoubleTime said...

    PJGuin23,

    Last year I used TurboTax, just looking back over what they did now, it looks like it did a Schedule C-EZ and appears on line 12 of Income (so guess that means I paid self-employment tax?)

    I read somewhere I’d be better off just listing it on line 21 as Other Income and putting Hobby DFS.

    It was only around $1,000 last year so I wasn’t too concerned. This year it is about $10,000 so I am wondering, would I be better off putting it on line 21 as Other Income? I have a normal job with income reported on a W2 as well if that matters.

    It definitely got hit as SE income. As for what’s more advantageous, it depends. You could also claim more expenses as a Schedule C.

    If you file as a hobby, then yes it would be more advantageous vs paying SE taxes. However, you already filed a Schedule C last year and like I said, more expenses to offset. I would also need to know how much you play amongst other items.

  • jakem

    I played NFL DFS on both Fanduel and Yahoo in 2016. I won 30k on Fanduel and lost 2k on Yahoo. Since Fanduel sent me a 1099-MISC I entered that in my tax software but it won’t let me deduct the 2k loss since it doesn’t see the 1099-MISC as gambling winnings and you can only deduct losses up to your winnings. Can I just enter the winnings as gambling income instead so I can deduct the loss?

    Also the software is suggesting that I need to pay an underpayment penalty since I owe a lot of taxes but I made nearly all that money in the final quarter of the year and couldn’t have estimated it earlier. Is this right?

  • PJGuin23

    DFS Tax Guru

    @jakem said...

    I played NFL DFS on both Fanduel and Yahoo in 2016. I won 30k on Fanduel and lost 2k on Yahoo. Since Fanduel sent me a 1099-MISC I entered that in my tax software but it won’t let me deduct the 2k loss since it doesn’t see the 1099-MISC as gambling winnings and you can only deduct losses up to your winnings. Can I just enter the winnings as gambling income instead so I can deduct the loss?

    Also the software is suggesting that I need to pay an underpayment penalty since I owe a lot of taxes but I made nearly all that money in the final quarter of the year and couldn’t have estimated it earlier. Is this right?

    There are ways you can deduct the 2k plus other expenses. PM me if you need specific tax assistance.

  • ldavidjm

    Last year I had to end up filing as a business (Schedule C) as it was grindy like a business with a large chunk of income. This year, I was surprised to receive a 1099 from FantasyDraft as I had quit playing DFS in early January due to new baby and just being tired of it etc. – I honestly thought that I had lost money in the first couple days of the year. The 1099 is for ~$1000, am I stuck filing Schedule C again even though I barely played last year?

  • PJGuin23

    DFS Tax Guru

    @ldavidjm said...

    Last year I had to end up filing as a business (Schedule C) as it was grindy like a business with a large chunk of income. This year, I was surprised to receive a 1099 from FantasyDraft as I had quit playing DFS in early January due to new baby and just being tired of it etc. – I honestly thought that I had lost money in the first couple days of the year. The 1099 is for ~$1000, am I stuck filing Schedule C again even though I barely played last year?

    You’re not stuck if it’s truly a hobby as that what it sounds like

  • kswetnam1342

    • 933

      RG Overall Ranking

      RG Overall Ranking
    @kswetnam1342 said...

    What’s the best way to go about disputing my actual winnings and what DK sent on the 1099?

    The difference between the RG Analyzer and the 1099 is $5611.96.

    Also, I did win a seat to the MMA Bracket Challenge that is valued at $3125. I won the qualifier in 2016, but the event hasn’t taken place yet.

    Got a response from DK. Even after adding in the deposit bonus and adjustment, there is still a difference of about $5100.

    Has anyone had issues with DK being wrong, or with the RG Analyzer being this off base?

    Any suggestions are welcome.

  • xpac21

    • 942

      RG Overall Ranking

      RG Overall Ranking
    • Ranked #95

      RG Tiered Ranking

      RG Tiered Ranking

    question…does amount made this year make it so where you have to fill out a form other than the 1099 misc to send? i mean i do rely on this as my only source of income, but having never filed taxes other than interest on cds/savings accounts 17 years ago, i dont want to go crazy (going to hr block to try to make sure i dont screw up) I only am doing football because i failed miserably at everything else, so i dont think i can really go the self-employment route since i dont play often enough

  • PJGuin23

    DFS Tax Guru

    @xpac21 said...

    question…does amount made this year make it so where you have to fill out a form other than the 1099 misc to send? i mean i do rely on this as my only source of income, but having never filed taxes other than interest on cds/savings accounts 17 years ago, i dont want to go crazy (going to hr block to try to make sure i dont screw up) I only am doing football because i failed miserably at everything else, so i dont think i can really go the self-employment route since i dont play often enough

    How much money have you earned and how much time do you spend?

  • carras

    Hi. I won $2k over the last year, I got notified by fanduel that they have to report it todo the IRS. I don’t usually report federal taxes, because I live in Puerto Rico. Am I forced to report this? Or is it a neglegible amount?

  • precator

    @kswetnam1342 said...

    Got a response from DK. Even after adding in the deposit bonus and adjustment, there is still a difference of about $5100.

    Has anyone had issues with DK being wrong, or with the RG Analyzer being this off base?

    Any suggestions are welcome.

    I am off by over 100 bucks myself. trying to see whats going on.

  • PJGuin23

    DFS Tax Guru

    @carras said...

    Hi. I won $2k over the last year, I got notified by fanduel that they have to report it todo the IRS. I don’t usually report federal taxes, because I live in Puerto Rico. Am I forced to report this? Or is it a neglegible amount?

    I have no experience with Puerto Rico based returns but I do know that US source income requires a 1040. If the income is solely Puerto Rico, then you just file a Puerto Rico form.

  • xpac21

    • 942

      RG Overall Ranking

      RG Overall Ranking
    • Ranked #95

      RG Tiered Ranking

      RG Tiered Ranking
    @PJGuin23 said...

    How much money have you earned and how much time do you spend?

    this year i won a gpp but lost some of it back in entry fees, so about 45k total for year between DK and FantasyDraft, i got a 1099 from both…i usually spend 2-3 days a week making lineups to multi enter GPPs for NFL, but only during NFL season

  • PJGuin23

    DFS Tax Guru

    @xpac21 said...

    this year i won a gpp but lost some of it back in entry fees, so about 45k total for year between DK and FantasyDraft, i got a 1099 from both…i usually spend 2-3 days a week making lineups to multi enter GPPs for NFL, but only during NFL season

    I would have to determine what the best course of action based on information you provide me. I’d lean that towards a Schedule C. If you want specific tax preparation/consulting, feel free to PM me.

  • ldavidjm

    @PJGuin23 said...

    You’re not stuck if it’s truly a hobby as that what it sounds like

    Oh? I was under the impression that if you filed Schedule C once you could “never” go back. Its just easier to file as a hobby and then I can use the cheaper version of Turbotax.

  • Stewburtx8

    • 682

      RG Overall Ranking

      RG Overall Ranking
    • 2012 FanDuel WFBC Finalist

      FanDuel WFBC Finalist
    @ldavidjm said...

    Oh? I was under the impression that if you filed Schedule C once you could “never” go back. Its just easier to file as a hobby and then I can use the cheaper version of Turbotax.

    I’ve probably made this statement before that it is not advisable to switch back and forth between Schedule C and “Other Income.” I still feel that statement is mostly true. Reason being is that it can open you up to an audit risk as it may look like you are filing your taxes each year based on what suits you best from a tax liability perspective and not based on looking at the actual IRS criteria to make a proper determination between “hobby” and “business.”

    The example I think of is one year you have $1k in DFS income but have $1k in expenses, you file on Schedule C to reduce your taxable income on DFS income to $0. Then the next year you win $10k and realize you do not have more than $1k in expenses. So you decide to file on Line 21 as “Other Income” so you can avoid paying self-employment tax. This type of activity is definitely not advisable.

    That being said, that does not mean you can “never” go back. Talk to a professional (PJGuin23 is right here) and if it determined your play truly is a hobby, then file as “Other Income” on Line 21. It seems like your DFS play truly did change from one year to the next, so it would likely make sense. if you were to be audited, you would have the ability to support this.

  • PJGuin23

    DFS Tax Guru

    @Stewburtx8 said...

    I’ve probably made this statement before that it is not advisable to switch back and forth between Schedule C and “Other Income.” I still feel that statement is true. Reason being is that it can open you up to an audit risk as it may look like you are filing your taxes each year based on what suits you best from a tax liability perspective and not based on looking at the actual IRS criteria to make a proper determination between “hobby” and “business.”

    The example I think of is one year you have $1k in DFS income but have $1k in expenses, you file on Schedule C to reduce your taxable income on DFS income to $0. Then the next year you win $10k and realize you do not have more than $1k in expenses. So you decide to file on Line 21 as “Other Income” so you can avoid paying self-employment tax. This type of activity is definitely not advisable.

    That being said, that does not mean you can “never” go back. Talk to a professional (PJGuin23 is right here) and if it determined your play truly is a hobby, then file as “Other Income” on Line 21. It seems like your DFS play truly did change from one year to the next, so it would likely make sense. if you were to be audited, you would have the ability to support this.

    The key factor in everything is can you support your position either way?

    Filing as a business isn’t always the worst thing even with SE taxes. Losses in future years are easier to deduct against other earned income plus a lower overall AGI could have Credit and Deduction benefits. There’s no one size fits all.

  • lhibbitts

    I enjoyed your article posted on here a few days ago, but I was looking for clarification on one point, as i’m relatively new to this – you said if you had “winnings over $600”…

    My question is this – when you reference “winnings”, are you talking about the gross total of the contests that paid out to you, or net profit after losses are considered? I’m playing on Yahoo to get my feet wet, and they won’t provide a 1099-Misc. For 2016, I didn’t exceed $600 in gross total of pay outs, not was my net profit over $600. 2017 may be different, so I want to stay ahead of the game.

    Thanks for your time.

  • PJGuin23

    DFS Tax Guru

    Just an FYI, refunds are being processed. I know the media has eluded to the fact they’re slower than usual this year.

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