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  • 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.

    *EDIT: There is a new DFS tax Q&A thread for 2019/2020. Please visit the new thread and ask any tax related questions you may have there.

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  • bwagg66

    I have never formed a sole P or a LLC but have considered doing so, especially if financially beneficial. Do you have to form a legal LLC to qualify for the QBI deduction? This will be my 4th straight profitable DFS year and in the past I have filed the income as a business and the IRS would agree. Thank you.

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    • Last Updated 1 year ago
  • DFSAccounting

    @Mwward21 said...

    How do you report your winnings on the 2018 as hobby income? Also do u use the cumulative net method to report winnings for each site (prizes won – total entry fees)
    For example if I won $2,000 dollar in prizes during the year and had $1,500 in entry fees during the year in yahoo would I report $500.
    For e

    Hobby income would go on Line 21 of your 1040.

    Yes. You should receive a 1099-MISC for your net winnings.

  • DFSAccounting

    @bwagg66 said...

    I have never formed a sole P or a LLC but have considered doing so, especially if financially beneficial. Do you have to form a legal LLC to qualify for the QBI deduction? This will be my 4th straight profitable DFS year and in the past I have filed the income as a business and the IRS would agree. Thank you.

    You do not need to form a legal entity.

    If you would like, we are available to discuss your individual situation in more detail. https://dfsaccounting.com/free-tax-consultation/

  • ford66

    I was wondering why I got taxed by Dk..for 24 percent off the 400 bucks I withdraw yesterday ? They never taxed me before .can you help ? Thanks

  • Croese

    Hey I’m a little bit confused about this new law about hobbies/losses.

    So if Fanduel sends me a 1099 with net winnings of $1,000

    But on Fanduel my total winnings are $2,000 and I had $1,000 in entry fees…

    Do I pay taxes on my $2,000 total winnings or my $1,000 net winnings?

    Thanks

  • CJtheGrump

    I’m a derp.

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    • Last Updated 1 year ago
  • mambaland

    @Croese said...

    So if Fanduel sends me a 1099 with net winnings of $1,000

    that is your answer…you pay on the 1099 amount

  • emhender

    A friend of mine had this happen is well. They taxed him, and withheld 24% of the CASHOUT amount, not his net winnings over the year.

    I had never had this happen to me, even as recently as my cashout a few weeks ago.

  • DFSAccounting

    @ford66 said...

    I was wondering why I got taxed by Dk..for 24 percent off the 400 bucks I withdraw yesterday ? They never taxed me before .can you help ? Thanks

    Sounds like they are withholding tax from your winnings. There should be a way to elect to not have tax withheld when you make withdrawals. If you can’t find how to do that when you log into your account, you may need to call them.

  • DFSAccounting

    @Croese said...

    Hey I’m a little bit confused about this new law about hobbies/losses.

    So if Fanduel sends me a 1099 with net winnings of $1,000

    But on Fanduel my total winnings are $2,000 and I had $1,000 in entry fees…

    Do I pay taxes on my $2,000 total winnings or my $1,000 net winnings?

    Thanks

    Your 1099 should be for your net winnings.

  • mambaland

    @DFSAccounting said...

    Sounds like they are withholding tax from your winnings. There should be a way to elect to not have tax withheld when you make withdrawals. If you can’t find how to do that when you log into your account, you may need to call them.

    how do they know what your bracket is and what if you live in canada? So when do they send you the money so you can pay your taxes? This is very odd practice

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    • Last Updated 1 year ago
  • Stewburtx8

    • 2012 FanDuel WFBC Finalist

    @mambaland said...

    how do they know what your bracket is and what if you live in canada? So when do they send you the money so you can pay your taxes? This is very odd practice

    When you receive a 1099, it will show the tax withheld. So you will enter both the amount of income AND also the tax already paid (similar to how a W2 works- income in box 1 and tax withheld in box 2). DraftKings will pass through any tax withheld to the IRS.

  • sutogame

    @DFSAccounting said...

    Sounds like they are withholding tax from your winnings. There should be a way to elect to not have tax withheld when you make withdrawals. If you can’t find how to do that when you log into your account, you may need to call them.

    Just DMed you about this. Please advise

  • DFSAccounting

    @sutogame said...

    Just DMed you about this. Please advise

    Replied to your DM

  • DFSAccounting

    @Stewburtx8 said...

    When you receive a 1099, it will show the tax withheld. So you will enter both the amount of income AND also the tax already paid (similar to how a W2 works- income in box 1 and tax withheld in box 2). DraftKings will pass through any tax withheld to the IRS.

    Yes. This is correct.

  • ChaosM83

    • 751

      RG Overall Ranking

    Do we have any type of understanding how it will work with the sports betting? Specifically for DraftKings where winnings can be used on either Sportsbook or DFS. If I win 1K today at the sports book, and lose it tonight in DFS will I still have to pay taxes on the 1K? Would they be submitting separate 1099’s, or should it be coming as 1?

    Not sure if we have heard any info on this yet or not.

  • mambaland

    Yahoo says they do not issue 1099 that PayPal would if it was needed,,,,I have never heard of this practice have you? Can you shed any light on this practice? Sounds like honor system?

  • Stewburtx8

    • 2012 FanDuel WFBC Finalist

    @ChaosM83 said...

    Do we have any type of understanding how it will work with the sports betting? Specifically for DraftKings where winnings can be used on either Sportsbook or DFS. If I win 1K today at the sports book, and lose it tonight in DFS will I still have to pay taxes on the 1K? Would they be submitting separate 1099’s, or should it be coming as 1?

    Not sure if we have heard any info on this yet or not.

    My guess is that they SHOULD be issuing a W2G on the Sportsbook side but continuing to issue 1099-MISC on the DFS side. So they should be treating them completely separate. You will then report them separately on your tax return.

  • JCM_the_3RD

    When does the “casual” DFS player need to file? $600 and above? Is that $600 total between any+all DFS sites? If I win $2,500 and because I probably am a total fish and lose it, do I still have to pay taxes on it?

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    • Last Updated 1 year ago
  • DFSAccounting

    @Stewburtx8 said...

    My guess is that they SHOULD be issuing a W2G on the Sportsbook side but continuing to issue 1099-MISC on the DFS side. So they should be treating them completely separate. You will then report them separately on your tax return.

    We are unsure of how DK would report; however, yes. They should report the activities separately

  • DFSAccounting

    @mambaland said...

    Yahoo says they do not issue 1099 that PayPal would if it was needed,,,,I have never heard of this practice have you? Can you shed any light on this practice? Sounds like honor system?

    Based on previous experience, our clients have not received a 1099 from Yahoo. They are able to export their CSV file and determine the winnings and losses

  • DFSAccounting

    @JCM_the_3RD said...

    When does the “casual” DFS player need to file? $600 and above? Is that $600 total between any+all DFS sites? If I win $2,500 and because I probably am a total fish and lose it, do I still have to pay taxes on it?

    Any winnings should be reported. The various sites will only issue you a 1099 if your net winnings are > $600.

  • MrWorldwide

    To use simple numbers, let’s say you get a 1099 from one site and your net winning are $10,000.00. I do not play enough to file as a business. Do you just input the $10,000.00 under Hobby income? Pay what will probably amount to be 20-30% after adding to my other taxable income? Is there anything else someone in this situation should be doing?

    Thank you for helping everyone with these questions!!

  • DFSAccounting

    @MrWorldwide said...

    To use simple numbers, let’s say you get a 1099 from one site and your net winning are $10,000.00. I do not play enough to file as a business. Do you just input the $10,000.00 under Hobby income? Pay what will probably amount to be 20-30% after adding to my other taxable income? Is there anything else someone in this situation should be doing?

    Thank you for helping everyone with these questions!!

    Yes. You will get a 1099 and include the net winnings on the 1099 on your tax return.

  • mambaland

    @DFSAccounting said...

    Based on previous experience, our clients have not received a 1099 from Yahoo. They are able to export their CSV file and determine the winnings and losses

    would they ever need to if the govt has no idea? take off your cpa hat for that one

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