INDUSTRY FORUM

Comments

  • DFSAccounting

    Hello Grinders!

    As the Official DFS Tax Partners of RotoGrinders , we here at DFS Accounting Services, LLC would like to take a moment to introduce ourselves. We are a consulting and advisory firm with 30+ years of collective accounting experience and are also a registered and licensed CPA firm with the AICPA and IL CPA Society. Our focus is on providing unparalleled tax and consulting services to the casual and professional Daily Fantasy Sports (DFS) Player. We also offer “free tax consultation on your DFS activities.”: dfsaccounting.com

    We aim to provide the RG Community with top-notch service for a 2nd year in a row!

    DFS is an exciting and competitive industry that offers big payouts and we understand the allure of playing DFS because we play it ourselves! With big winnings comes big tax responsibilities, and that’s where we come in!

    Now with that said, let’s get the DFS Tax Q&A going… please ask away!

    DFSAS Disclaimer: We 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 us on RotoGrinders or any other media forum does not constitute an accountant-client relationship. At your request, we can send an engagement letter, which outlines our responsibilities provided under our engagements.

  • mambaland

    @DFSAccounting said...

    No problem at all. Just to cover yourself, you might want to get that in writing from the preparer at H&R Block. We’re fairly confident that they won’t do that, but you can try. Their terms of service also have some strict rules around how long you have to notify them and the methods used to notify them. Hopefully, you don’t have to worry about the notice.

    what do you think the odds are the IRS even catches it? problem is going to bed each night knowing you may get a letter any day saying you owe…peace of mind has a price

  • DFSAccounting

    @mambaland said...

    what do you think the odds are the IRS even catches it? problem is going to bed each night knowing you may get a letter any day saying you owe…peace of mind has a price

    Depends on the entire tax return as a whole and how the returns were prepared in the prior year. Can’t say for sure, but we’d assume that the IRS will be looking at deductions that were taken in prior years that don’t conform to current tax law.

  • brink7

    Wow, I am really having a time with this specifically related to my first year playing Yahoo last year. I have my W-2’s from FD and DK nice and neat with all the info on there. And it has never been a problem at H&R Block because it’s all there in the paperwork. But I know tonight when I go there and I self-report my little bit of Yahoo net winnings it will probably unfortunately cause confusion with my preparer as to why I do not have a W-2 from Yahoo and I will have to explain the whole they only go through Paypal so they do not send a W-2. My question is what is the Tax Id or Employer ID or whatever you call it for Yahoo – I cannot find it for the life of me, I know the preparer will ask about that and I try to look it up and keep getting taken to advertisements. I am just trying to prepare in advance for my tax session, and if there is any other info etc. I need to have on hand specifically for Yahoo when self-reporting my Yahoo net winnings to help my H&R Block tax preparer out when filing tonight (?) Also did anyone else run into this same problem as well? Thank you in advance.

  • brink7

    PS one little add-on to that last message I live in California.

  • d735123

    @brink7 said...

    Wow, I am really having a time with this specifically related to my first year playing Yahoo last year. I have my W-2’s from FD and DK nice and neat with all the info on there. And it has never been a problem at H&R Block because it’s all there in the paperwork. But I know tonight when I go there and I self-report my little bit of Yahoo net winnings it will probably unfortunately cause confusion with my preparer as to why I do not have a W-2 from Yahoo and I will have to explain the whole they only go through Paypal so they do not send a W-2. My question is what is the Tax Id or Employer ID or whatever you call it for Yahoo – I cannot find it for the life of me, I know the preparer will ask about that and I try to look it up and keep getting taken to advertisements. I am just trying to prepare in advance for my tax session, and if there is any other info etc. I need to have on hand specifically for Yahoo when self-reporting my Yahoo net winnings to help my H&R Block tax preparer out when filing tonight (?) Also did anyone else run into this same problem as well? Thank you in advance.

    So, how did it go?

  • brink7

    It was much ado about nothing, turned out fine. He just typed in Yahoo on the computer, I guess he didn’t need the other info. I did what I was supposed to and reported it, so just glad to have it done. I was stressing about it for no reason really.

  • d735123

    @brink7 said...

    It was much ado about nothing, turned out fine. He just typed in Yahoo on the computer, I guess he didn’t need the other info. I did what I was supposed to and reported it, so just glad to have it done. I was stressing about it for no reason really.

    Cool. Glad to hear it all worked out.

  • brink7

    Thank you, appreciate that. Glad it’s done now.

  • BarkeviousMingo

    @krighton said...

    1099

    My DK 1099 is a few hundred higher than it should be too. What should I do?

  • DFSAccounting

    @BarkeviousMingo said...

    My DK 1099 is a few hundred higher than it should be too. What should I do?

    We’d recommend you contact DK support. It is possible they are factoring in something other than the winnings and direct entry fees.

  • smccarty

    • 777

      RG Overall Ranking

    Thanks again for taking DFS tax questions!

    I received a 1099 in 2017, but not in 2018 (net loss on all sites). Even with that in mind, is it acceptable to write off my research tools even though no profit was realized?

  • DFSAccounting

    @smccarty said...

    Thanks again for taking DFS tax questions!

    I received a 1099 in 2017, but not in 2018 (net loss on all sites). Even with that in mind, is it acceptable to write off my research tools even though no profit was realized?

    Sounds like you file as a business? If so, yes. You can still take the research tools as a deduction.

  • tbird05

    I’m getting irked when trying to complete my taxes online. I’m just filling out a basic return with a W2 and 1099’s from FD and DK. Everything is good until I run the alerts.

    Error or Omission: Schedule C – Principal Business or Profession
    You have not entered your principal business or profession on Schedule C.

    I never reported any business income. It even says 0. All I did was enter information in the 1099 MISC section for Fanduel and Draftkings. I made sure to click the check mark for “other income” and “not subject to self-employment taxes” boxes.

    This has never happened to me before. DFS is just a hobby for me. I shouldn’t have to fill out a Schedule C form, correct?

    …maybe i should just ignore the alert since everything is entered correctly and proceed with filing?

    I guess I should add that I had Draftkings withhold some of my winnings this year, I reported that amount in box 4. Federal Income tax withheld. I’m not sure if that makes any difference.

  • tbird05

    I just used a different popular tax website and filed with no issues. The numbers came out exactly the same as the last site.

    I guess it could have been a generic alert used because 1099 MISC’s are also used for those that are self employed. At any rate, they lost my business this year due to a silly alert that didn’t apply to my situation.

  • smccarty

    • 777

      RG Overall Ranking

    “Sounds like you file as a business? If so, yes. You can still take the research tools as a deduction.”

    Thank you for the quick response!

    Technically, I filed as a sole proprietor — nothing greater than that. Does this change your answer at all?

  • DFSAccounting

    @smccarty said...

    “Sounds like you file as a business? If so, yes. You can still take the research tools as a deduction.”

    Thank you for the quick response!

    Technically, I filed as a sole proprietor — nothing greater than that. Does this change your answer at all?

    As long as it is under a sch. c than no. Answer should stay the same.

  • BarkeviousMingo

    I won on DK and lost on FD. Turbotax treated my FD loss as Gambling Losses and said my risk for audit is low. I hope they’re right, lol.

  • DFSAccounting

    @BarkeviousMingo said...

    I won on DK and lost on FD. Turbotax treated my FD loss as Gambling Losses and said my risk for audit is low. I hope they’re right, lol.

    Depends on the entire return as a whole. We’ve read the IRS guidance as DFS is either a business or hobby, not gambling.

    Let us know if you want us to take a second look.

  • AP4Pres

    • 912

      RG Overall Ranking

    • x2

      2014 FanDuel WFBC Finalist

    • 2018 FanDuel WFBC Finalist

    @DFSAccounting said...

    I won on DK and lost on FD. Turbotax treated my FD loss as Gambling Losses and said my risk for audit is low. I hope they’re right, lol.

    I have a similar question. I won a decent amount on FD, but lost on both DK and Yahoo. I also use Turbotax and file myself. Just using ballpark numbers, if my 1099 from FD was for 50k, and my net losses on DK were 10k and 5k on Yahoo then am I only responsible to pay taxes on my total DFS net earnings of 35k? That is my understanding, but want o make sure I am doing it correctly. Also, does anyone know how to actually report that in the Turbotax software since I have the 1099 for earning from FD and was reported to IRS, but don’t have any documentation of the losses other than pulling the numbers myself from my account history for 2018 on DK and Yahoo. PS. Yahoo has been a total nightmare since they say you have to get it thru Paypal, does anyone have a better method to get the info on Paypal for Yahoo net earnings/losses? Of course I’ve procrastinated and down to the last minute to file now, so any prompt responses would be much appreciated.

  • BarkeviousMingo

    @AP4Pres said...

    I have a similar question. I won a decent amount on FD, but lost on both DK and Yahoo. I also use Turbotax and file myself. Just using ballpark numbers, if my 1099 from FD was for 50k, and my net losses on DK were 10k and 5k on Yahoo then am I only responsible to pay taxes on my total DFS net earnings of 35k? That is my understanding, but want o make sure I am doing it correctly. Also, does anyone know how to actually report that in the Turbotax software since I have the 1099 for earning from FD and was reported to IRS, but don’t have any documentation of the losses other than pulling the numbers myself from my account history for 2018 on DK and Yahoo. PS. Yahoo has been a total nightmare since they say you have to get it thru Paypal, does anyone have a better method to get the info on Paypal for Yahoo net earnings/losses? Of course I’ve procrastinated and down to the last minute to file now, so any prompt responses would be much appreciated.

    I put in the DK 1099 info on Turbotax, and when it asked me what it was for, I selected Prize Winnings. Then it asked me what my gambling losses were, and I put in what I lost on FD.

  • DFSAccounting

    @BarkeviousMingo said...

    I put in the DK 1099 info on Turbotax, and when it asked me what it was for, I selected Prize Winnings. Then it asked me what my gambling losses were, and I put in what I lost on FD.

    It is our understanding that DFS is not considered gambling under the Internal Revenue Code, and therefore, the activity would not qualify for offsetting income up to losses.

  • BarkeviousMingo

    @DFSAccounting said...

    It is our understanding that DFS is not considered gambling under the Internal Revenue Code, and therefore, the activity would not qualify for offsetting income up to losses.

    Yeah, gonna file an amendment. Gonna say I’m doing it as a business, and deduct my FD losses as expenses in Schedule C. What do I put for the description of the expense?

  • mtdurham

    @DFSAccounting said...

    No problem at all. Just to cover yourself, you might want to get that in writing from the preparer at H&R Block. We’re fairly confident that they won’t do that, but you can try. Their terms of service also have some strict rules around how long you have to notify them and the methods used to notify them. Hopefully, you don’t have to worry about the notice.

    Hehehe any tax preparer willing to put anything in writing to a client is in the wrong business. Heck in the wrong INDUSTRY. The #1 rule of working in any financial capacity is never put anything in writing to a client. Thats how you get in trouble. You always want it to be he said / she said then keep good notes on your end. That way you stand a pretty good chance in arbitration.

    Good thinking dunzor on the POM. Really good thinking.

    I could say a lot more about that plan but im not gonna put it in writing.

  • mtdurham

    @mambaland said...

    what do you think the odds are the IRS even catches it? problem is going to bed each night knowing you may get a letter any day saying you owe…peace of mind has a price

    Practically nil, although bragging about it on a non anonymous messageboard obviously raises that chance.

    The IRS prob aint going back more than 3 years for something of this consequence. Ive got spinach older than that in my fridge.

    Still i think the correct route for most folks is just to slap 25% of any large winnings into a SEP so it cant be taxed. I realize with some peoples occupation that might not be an option.

  • Campanisto

    @mambaland said...

    i got these from my cpa and would appreciate feedback…a few different scenarios

    Here is a link to an article in the AICPA’s Journal of Accountancy that analyzed Fantasy Football tax implications back in 2016 before the tax rule changed on hobby loss deductions. Some of the methodology is explained well on how to analyze the activity and is still relevant.

    https://www.journalofaccountancy.com/newsletters/2016/feb/how-to-report-fantasy-football-winnings.html

    So the new tax law that went into effect for 2018 will affect Hobby Income/Losses in a huge way.

    Pre 2018, you were able to claim the 1099 M income on Line 21 as other income from Hobby. You were then also allowed to take all hobby expenses up to the amount of income on Schedule A as a miscellaneous deduction subject to the 2% floor. Starting in 2018, all miscellaneous deductions were suspended until 2025 as part of the new tax changes.

    If you run your activity as a business, you can deduct the expenses related to the activity as well as the losses from the activity. There is an additional self-employment tax (15.3%) on the net profit of the business. You will be able to see the effect on the different treatments below in 2 scenarios.

    The IRS states the following to determine whether the activity is a hobby or a business:

    In making the distinction between a hobby or business activity, take into account all facts and circumstances with respect to the activity. No one factor alone is decisive. You must generally consider these factors in determining whether an activity is a business engaged in making a profit:

    -Whether you carry on the activity in a businesslike manner and maintain complete and accurate books and records.

    -Whether the time and effort you put into the activity indicate you intend to make it profitable.

    -Whether you depend on income from the activity for your livelihood.

    -Whether your losses are due to circumstances beyond your control (or are normal in the startup phase of your type of business).

    -Whether you change your methods of operation in an attempt to improve profitability.

    -Whether you or your advisors have the knowledge needed to carry on the activity as a successful business.

    -Whether you were successful in making a profit in similar activities in the past.

    -Whether the activity makes a profit in some years and how much profit it makes.

    -Whether you can expect to make a future profit from the appreciation of the assets used in the activity.

    .Here is another article about the change in gambling loss deductions which you may also consider relevant if you think the activity is gambling which the IRS would also allow.

    https://www.accountingweb.com/tax/individuals/gambling-loss-deductions-broadened-under-new-tax-law

    Hi,
    I am new here. Like this forum very much, very useful and interesting information. Nice to be part of it.

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

Sites mentioned in this thread

Use our links to sign up and deposit on sites listed in this thread to get these bonuses:

Subforum Index

New RotoGrinders Sports Betting Section!

Are you a DFS player who wants to get into sports betting? Head over to our sports betting resources area and get the full rundown on legal online sports betting in the US.

If you're lucky enough to reside in (or close to) states with legal online sports betting, like New Jersey, then check out our NJ online sportsbook bonuses page to see what free bets are available to you right now.

Also of interest to DFSers are our sportsbook reviews, so remember to check out our DraftKings Sportsbook review and our FanDuel Sportsbook review to see what the DFS giants are up to in the sports betting realm.

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. Our goal is to help all of our members make more money playing daily fantasy sports!

Disclosures: All RotoGrinders content contributors are active DFS players. Contributor screen names can be found on their respective RotoGrinders profile pages. Contributors reserve the right to use players or strategies not discussed in their content on RotoGrinders.