INDUSTRY FORUM

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  • SmartWater

    Marketing and Social Media Manager

    Hello Grinders!

    One of the most important days of the DFS year is nearly upon us: the Super Bowl? Nope – the tax deadline!

    We’ve once again teamed up with the best in the business to help make sure you have everything in order for the current tax year.

    DFS Accounting Services, LLC has over 30 years of collective accounting experience and are a registered and licensed CPA firm with the AICPA and IL CPA Society. In short, they can provide unparalleled tax and consulting services for casual players and seasoned DFS Pros alike. They offer free tax consultation for your DFS activities over at dfsaccounting.com

    This is our 3rd year working with DFS Accounting and many of our own staff use them for their annual tax services. If you have any questions, this is your chance to ask away in this year’s Q&A thread!

    DFSAS Disclaimer: DFS Accounting, LLC are Certified Public Accountants licensed by the AICPA and State of Illinois. Any information provided is for informational purposes only and is not a substitute for obtaining accounting, tax, or financial advice from a professional accountant, CPA, lawyer or other competent financial professional. Information posted by DFS Accounting, LLC on RotoGrinders or any other media forum does not constitute an accountant-client relationship. At your request, DFS Accounting, LLC can send an engagement letter, which outlines their responsibilities provided under their engagements.

  • TheDataDetective

    • Blogger of the Month

    Thanks for hosting this Q&A! My understanding is that FD and DK Sportsbooks will issue W-2G’s for individual bets or casino wins that exceed the reporting threshold (e.g. wagers that pay $600 or more at 300-to-1 or greater odds) and issue 1099’s if non-wager bonuses exceed a total of $600 for the year. How will free bets and odds boosts count toward the latter? Thanks!

  • DFSAccounting

    First (and probably foremost), a big thank you to RG for giving us the opportunity to assist their loyal users another year with their tax reporting. We very much appreciate the opportunity.

    Now down to business; there are questions in the forum.

  • DFSAccounting

    Yes. Based on our conversations with DK/FD sportsbook income will be reported on form W-2G and the thresholds quoted are correct based on the IRS instructions as of today.

    For free bets and odds boosts, these become more complicated. We understand that these will be treated in a similar manner as DK Crowns (for example).

  • TheDataDetective

    • Blogger of the Month

    @DFSAccounting said...

    Yes. Based on our conversations with DK/FD sportsbook income will be reported on form W-2G and the thresholds quoted are correct based on the IRS instructions as of today.

    For free bets and odds boosts, these become more complicated. We understand that these will be treated in a similar manner as DK Crowns (for example).

    Thanks! How are DK crowns treated?

  • CaptainKirk12

    • x2

      2016 FanDuel WFBC Finalist

    • 2016 FanDuel NFL Playboy Mansion Finalist

    I received a 1099-K from PayPal because they counted all of my FanDuel Sportsbook withdrawals as payments. What is the best way to address this? I reached out thru your website as well. Thanks

  • DFSAccounting

    @TheDataDetective said...

    Thanks! How are DK crowns treated?

    Our understanding is that DK Crowns are taxable when they are cashed/used.

  • DFSAccounting

    @CaptainKirk12 said...

    I received a 1099-K from PayPal because they counted all of my FanDuel Sportsbook withdrawals as payments. What is the best way to address this? I reached out thru your website as well. Thanks

    I think one of our partners reached out to you via email on this topic? Did you get a response?

  • TheDataDetective

    • Blogger of the Month

    @DFSAccounting said...

    Our understanding is that DK Crowns are taxable when they are cashed/used.

    Ok, so then free bets that are used will be treated as income for the purposes of 1099 income at full face value? I wonder how odds boosts will be valued.

    None of this sits right with me given how, at least on DK Sportsbook, free bets and odds boosts are not tracked in your transaction history.

  • drewcrawford03

    • 2019 FanDuel FantaSea Finalist

    • 984

      RG Overall Ranking

    • 2018 FanDuel WFFC Finalist

    I won money on FD and lost on DK, trying to itemize and deduct the losses on TurboTax (The winnings are more). There is no place on TurboTax to do this after searching around everywhere. There is a screen that mentions it, but nowhere to type in. Anyone have success with this?

    Edit: I got this to work. New question…

    If I enter my 1099-MISC as income, then itemize and deduct my losses, it counts my income earned twice. When I delete my 1099-MISC info and include the income and losses in the “Less Common Income” section, it balances out accurately. Question is, will I get flagged for not actually listing my 1099-MISC even though it essentially appears in the “Less Common Income” section? Hope that makes sense, if not I’d be glad to clarify further.

  • CaptainKirk12

    • x2

      2016 FanDuel WFBC Finalist

    • 2016 FanDuel NFL Playboy Mansion Finalist

    @DFSAccounting said...

    I think one of our partners reached out to you via email on this topic? Did you get a response?

    Yes,

    I received a quick email response and was able to schedule a phone call with Mike. He was extremely friendly & knowledgeable. He answered my questions during a nearly 30 minute phone-call. Would recommend this CPA Firm to anyone looking for help. I’ll be in touch about utilizing your services.

    Thanks.

  • DFSAccounting

    @drewcrawford03 said...

    I won money on FD and lost on DK, trying to itemize and deduct the losses on TurboTax (The winnings are more). There is no place on TurboTax to do this after searching around everywhere. There is a screen that mentions it, but nowhere to type in. Anyone have success with this?

    Edit: I got this to work. New question…

    If I enter my 1099-MISC as income, then itemize and deduct my losses, it counts my income earned twice. When I delete my 1099-MISC info and include the income and losses in the “Less Common Income” section, it balances out accurately. Question is, will I get flagged for not actually listing my 1099-MISC even though it essentially appears in the “Less Common Income” section? Hope that makes sense, if not I’d be glad to clarify further.

    DFS is considered a hobby (from an IRS perspective). You cannot deduct expenses or losses against the income. The only way you can do this is if your DFS venture is considered a business.

  • DFSAccounting

    @CaptainKirk12 said...

    Yes,

    I received a quick email response and was able to schedule a phone call with Mike. He was extremely friendly & knowledgeable. He answered my questions during a nearly 30 minute phone-call. Would recommend this CPA Firm to anyone looking for help. I’ll be in touch about utilizing your services.

    Thanks.

    Thank you for the compliments! Mike is awesome!

  • Volkster6

    What are the implications for Canadian residents? We signed a form proving we are in fact Canadian but should we anticipate any forms/requirements on our end? Thank you!

  • mr_papageorgio

    Does anyone know when DK usually issues their tax forms?

  • drewcrawford03

    • 2019 FanDuel FantaSea Finalist

    • 984

      RG Overall Ranking

    • 2018 FanDuel WFFC Finalist

    Are you positive on this? Feel like I’ve heard from many other sources that you can offset losses without claiming as a business. @dfsaccounting

  • drewcrawford03

    • 2019 FanDuel FantaSea Finalist

    • 984

      RG Overall Ranking

    • 2018 FanDuel WFFC Finalist

    To be clear, I am itemizing

  • drewcrawford03

    • 2019 FanDuel FantaSea Finalist

    • 984

      RG Overall Ranking

    • 2018 FanDuel WFFC Finalist

    @DFSAccounting said...

    DFS is considered a hobby (from an IRS perspective). You cannot deduct expenses or losses against the income. The only way you can do this is if your DFS venture is considered a business.

    Ok, I just talked to a Tax specialist and you are completely wrong. If anyone else reading this needs further clarification, reach out to me via DM.

  • SkateFiend

    @DFSAccounting said...

    Our understanding is that DK Crowns are taxable when they are cashed/used.

    Based on information from several online article, net profit is calculated this way

    net profit = winnings – entry fees + bonuses

    If I understand this correctly, if I use ALL my DK crowns to enter contests but the total money I won is less than the value of the crowns, then technically I lost money? DK crowns basically become entry fees when I use them?

  • sotnohc

    • 641

      RG Overall Ranking

    Drew – unless you file a Sch C, it is considered a hobby. Pre-TCJA hobby losses were a misc deduction subject to 2% of AGI floor, similar to unreimbursed employee expenses, tax prep fees, union dues, etc. However, the new tax law removed those types of deductions. DFS accounting is absolutely correct, unless you are an actual business, losses are not deductible whatsoever.

  • drewcrawford03

    • 2019 FanDuel FantaSea Finalist

    • 984

      RG Overall Ranking

    • 2018 FanDuel WFFC Finalist

    @sotnohc said...

    Drew – unless you file a Sch C, it is considered a hobby. Pre-TCJA hobby losses were a misc deduction subject to 2% of AGI floor, similar to unreimbursed employee expenses, tax prep fees, union dues, etc. However, the new tax law removed those types of deductions. DFS accounting is absolutely correct, unless you are an actual business, losses are not deductible whatsoever.

    I was told completely differently from a tax professional I trust. Entered 1099 as “Additional Income”, entered itemized losses on the next screen, done and good. Was even told this is very common and happens all the time.

  • TheDataDetective

    • Blogger of the Month

    @SkateFiend said...

    Based on information from several online article, net profit is calculated this way

    net profit = winnings – entry fees + bonuses

    If I understand this correctly, if I use ALL my DK crowns to enter contests but the total money I won is less than the value of the crowns, then technically I lost money? DK crowns basically become entry fees when I use them?

    No. The formula is this…

    net profit = winnings – entry fees + bonuses

    …not this, which is how you’re interpreting it:

    net profit = winnings – (entry fees + bonuses)

    Bonuses are equivalent to winnings.

  • drewcrawford03

    • 2019 FanDuel FantaSea Finalist

    • 984

      RG Overall Ranking

    • 2018 FanDuel WFFC Finalist

    @TheDataDetective said...

    No. The formula is this…

    net profit = winnings – entry fees + bonuses

    …not this, which is how you’re interpreting it:

    net profit = winnings – (entry fees + bonuses)

    Bonuses are equivalent to winnings.

    FanDuel, known for their incompetence, has told me repeatedly throughout the year (I’ve asked several times), that any vouchers/tickets are rolled into entry fees and do not count as “winnings”. However, I think you are correct here and they had no idea what they were talking about.

  • DFSAccounting

    @drewcrawford03 said...

    I was told completely differently from a tax professional I trust. Entered 1099 as “Additional Income”, entered itemized losses on the next screen, done and good. Was even told this is very common and happens all the time.

    Hello Drew,

    @sotnohc is correct in his statement. Sounds like you play DFS as a hobby. Unfortunately TCJA repealed all hobby losses and deductions. The only way to offset your income with losses is to report your dfs activity as a business, most likely in your situation on the schedule C.

    If your “friend” is a tax professional you trust, why isn’t he/she preparing your tax return? You should use them instead of doing it yourself on turbo tax.

  • DFSAccounting

    @drewcrawford03 said...

    FanDuel, known for their incompetence, has told me repeatedly throughout the year (I’ve asked several times), that any vouchers/tickets are rolled into entry fees and do not count as “winnings”. However, I think you are correct here and they had no idea what they were talking about.

    looks like you are going after everyone today?

  • drewcrawford03

    • 2019 FanDuel FantaSea Finalist

    • 984

      RG Overall Ranking

    • 2018 FanDuel WFFC Finalist

    Only the people that are wrong

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