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  • DFSAccounting

    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 Rotogrinders 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, we can provide unparalleled tax and consulting services for casual players and seasoned DFS Pros alike, and we also offer free tax consultation for your DFS activities over at dfsaccounting.com

    This is our 4th year working with Rotogrinders and we are proud that so many of the RG staff and members use our annual tax services! We hope for another successful year helping the RG community again this tax season, and 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.

  • DFSAccounting

    @dbrown0147 said...

    I received my 1099 from DK.

    I also was profitable on DK sports book.

    Is my understanding correct that I only include the net income from daily fantasy winnings but for gambling winnings I include gross winnings and can deduct losses?

    If you’re DFS & gambling activities do not qualify as a business, then the net 1099 from DK and any W-2G forms would be reported on Line 8 of your 1040. Gambling losses would be reported on Schedule A

  • ovonel

    If my entree fees were $8k, winnings were 6k, and my net loss was negative 2k do i still get a 1099 form? Or is it just for people that have net winnings of $600?

  • btwice80

    @DFSAccounting said...

    yeah using paypal to transfer funds have proven to be a mess and we are sorry you are in this position!

    Did something change this year with Paypal and 1099-K? As far as I can tell, the thresholds are the same as they’ve always been—exceed both $20K gross and 200 individual payments received. No matter how much I win, I’ll never approach 200 DFS payments received in a year because I’m not constantly depositing and withdrawing.

  • TheDataDetective

    • Blogger of the Month

    @btwice80 said...

    Did something change this year with Paypal and 1099-K? As far as I can tell, the thresholds are the same as they’ve always been—exceed both $20K gross and 200 individual payments received. No matter how much I win, I’ll never approach 200 DFS payments received in a year because I’m not constantly depositing and withdrawing.

    Exactly. Unless PayPal is sending 1099s to people who didn’t meet these thresholds, it seems easy to avoid getting a 1099 from them.

  • BigA

    Ive been on disabilty/ssi for a long time now. Ive been playing on draftkings and fanduel for awhile now and winnings never went anymore then $600 in a year. Last November I hit 1K and was sent the tax form. I’m 45 and haven’t worked or filed since I was 20. Should I be filing the winnings? Thanks

  • GP012

    @btwice80 said...

    Did something change this year with Paypal and 1099-K? As far as I can tell, the thresholds are the same as they’ve always been—exceed both $20K gross and 200 individual payments received. No matter how much I win, I’ll never approach 200 DFS payments received in a year because I’m not constantly depositing and withdrawing.

    For most states, it’s 200 transactions AND $20,000 gross payment volume. However, a couple states are significantly lower:

    - Vermont, Massachusetts, Virginia, Maryland: $600 USD in gross payment volume from sales of goods or services in a single calendar year regardless of the number of transactions;

    - Illinois: $1,000 USD in gross payment volume of goods or services in a single calendar year with at least 4 payment transactions processed.

  • DFSAccounting

    @ovonel said...

    If my entree fees were $8k, winnings were 6k, and my net loss was negative 2k do i still get a 1099 form? Or is it just for people that have net winnings of $600?

    if you have a net loss for the year, you will not get a 1099-misc. You have to have net winnings of $600 or more.

  • DFSAccounting

    No, based on the information you provided, you do not have enough taxable income to warrant filing a tax return.

  • sportzfan99

    Hi, last year I won $13000 on Fanduel and lost $15000 on Draftkings. How should I report this on my tax return? Should I put my Fanduel winnings as Gambling WInnings, and Draftkings losses as Gambling Losses? Or do I need to file as a business, and report the Draftkings losses as business expenses?

  • NextSignal

    Hello, great resource here thanks for the thread.

    I have my 1099 and income to report but I’m stumped by a question concerning what state I made the income in. I technically made the income from my house in Colorado, however the 1099 is from Fanduel in NY. Do I have to report the income as income earned in another state outside of my state, or am I overthinking this?

  • timmytay1

    Received my 1099 from DK. Have they already deducted entry fees or do I have to do that myself? Thanks.

  • SkateFiend

    I downloaded the 1099 from the DK site. My question is somewhat related to timmytay1’s above – Is the amount in the other income section the total money I earned at DK, or is it the profit (meaning money I made minus entry fees)?

    Thanks

  • ludagrizz

    I believe the amount is already deducted. I won $45k but the “other income” is a couple thousand below that.

  • Fonzie77

    I have a question. My 1099 saying I profit 18k but I only received 11800 as a check payment and the rest was issued as a refund to my credit cards. Why do I pay taxes on money refunded?

  • CJtheGrump

    Disappointed with how slow DK was with their 1099. Just got it the other day, but we filed already 2 weeks ago The form was not available at the time. I looked over the past year and thought maybe I didn’t win enough for it to matter.

    We’ll do an amended return, but that was really frustrating. I don’t know what the deadline is supposed to be, but it seems to me end of January is a reasonable expectation. We had everything else by then.

  • SkateFiend

    @CJtheGrump said...

    Disappointed with how slow DK was with their 1099. Just got it the other day, but we filed already 2 weeks ago The form was not available at the time. I looked over the past year and thought maybe I didn’t win enough for it to matter.

    We’ll do an amended return, but that was really frustrating. I don’t know what the deadline is supposed to be, but it seems to me end of January is a reasonable expectation. We had everything else by then.

    I worked a freelancer for a few years and I don’t recall getting 1099 this late. Of course DK likely has to send thousands of these forms, but why didn’t it appear earlier in my document center?

    If DK doesn’t count crown as entry fees, then I probably can’t play on DK anymore.

  • TheDataDetective

    • Blogger of the Month

    @SkateFiend said...

    Of course DK likely has to thousands of these forms

    It shouldn’t matter whether they have to do 10 or 1 million. It’s not like they’re generating them by hand. If it takes more than a few days to get them generated and QA tested across their entire userbase, they should fire their dev team.

  • ryan7962

    I wish draftkings would put up a disclaimer for cashing out with paypal. I’m dealing with a nightmare situation which essentially I got audited for 2018 prolly will get audited for 2019 as well due to the fact i didnt know I received a 1099k from paypal for large sums of money. Received a cp2000 notice then a couple months after that received a cp3219a notice as well. It’s been very stressful for me considering I I ly netted in 2018 around a lot of 3k

  • BootKorleone

    @alphadelt said...

    Very glad I found this. So, here’s my breakdown (roughly) between FD/DK:

    Total Wagered: $100,000
    Total Won: $110,000

    So, obviously this is a net $10,000 gain, and I believe enough to lose our standard deduction. However, am I to be taxed (federal and state (PA)) on $110,000 or just the $10,000. I’ve seen some conflicting reports across the board, and am happy that there is someone qualified answering questions.

    How you do it

  • crazylox2001

    I have a non dfs tax related question if someone could help me out

  • ryan7962

    Draftkings customer support about transaction history doesn’t seem to be very good

  • SkateFiend

    I asked DK if crowns will be counted as entry fees and counted against my winnings (if that contest fails to cash), and they seemed to have confirmed it. Part of their response below.

    “Thanks for reaching out to us today.

    That’s a great question that I’m happy to answer! First, we ask that you please note that the declaration and payment of all income taxes associated with contest winnings are the sole responsibility of the contest winner. All users that had net winnings greater than $600 at the end of the 2020 Tax year will receive a Form-1099 from DraftKings.

    Net winnings are calculated by the following formula:
    (Winnings – Entry Fees) + Bonuses

    This does include all entry fees such as crowns, DK dollars, tickets, and cash. This does mean that if you had $500 worth of crowns that you used as entry fees, they would count against your overall winnings. It might help to note that 550 crowns equates to $1.”

  • DFSAccounting

    @sportzfan99 said...

    Hi, last year I won $13000 on Fanduel and lost $15000 on Draftkings. How should I report this on my tax return? Should I put my Fanduel winnings as Gambling WInnings, and Draftkings losses as Gambling Losses? Or do I need to file as a business, and report the Draftkings losses as business expenses?

    That is a great question, with the IRS recently commenting on DFS winnings and considering it gambling winnings, you would record your Fanduel winnings as gambling winnings and draftkings losses. You can report it as a business but you need to review your playing style and see if it enables you to report as a business, ie. profit motive, amount invested (is it material to you), time invested (35+ a week) etc. You should also set you sessions based on your playing style as well. In this, case it looks like you set your session as a year long session.

  • DFSAccounting

    @Fonzie77 said...

    I have a question. My 1099 saying I profit 18k but I only received 11800 as a check payment and the rest was issued as a refund to my credit cards. Why do I pay taxes on money refunded?

    Your net activity during the year dictates your taxable income. If your net winnings for 2020 were $18k on DK or FD, then that is what your 1099misc should say. It doesn’t matter when or how you withdraw that money (ie check payment or refund to credit cards). It only matters when and how you withdraw your money if you use Paypal, we highly suggest you don’t.

  • DFSAccounting

    @ryan7962 said...

    I wish draftkings would put up a disclaimer for cashing out with paypal. I’m dealing with a nightmare situation which essentially I got audited for 2018 prolly will get audited for 2019 as well due to the fact i didnt know I received a 1099k from paypal for large sums of money. Received a cp2000 notice then a couple months after that received a cp3219a notice as well. It’s been very stressful for me considering I I ly netted in 2018 around a lot of 3k

    Yes, do not use paypal. Getting a 1099-k reports income, in which you might not have otherwise. Reach out to us at infodfsaccounting.com . Dealing with the IRS is a pain and we can help you.

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