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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.

  • Desiderio3

    A message to the IRS

  • whiterock

    • 335

      RG Overall Ranking

    • Ranked #43

      RG Tiered Ranking

    I’ve been playing since 2013. I’ve been mostly profitable, but have had a loss on sites that I never claimed on my returns. Can I go back and claim those losses?

  • jeffcole1985

    I suck at DFS and should most certainly give it up. I have lost way more than I have won this year. If I had to guess, I’d say I’m $10-15k in the red for 2018. Is there any benefit to claiming my losses when filing my personal return for 2018?

  • golferdude31

    • 78

      RG Overall Ranking

    • Ranked #6

      RG Tiered Ranking

    • 2016 King of Summer Champion

    Hi,

    This 20% pass through deduction is interesting and one I hadn’t considered. I’ve filed a Schedule C for Fantasy Sports the last 2-3 years and plan to again this year. When exactly does this deduction take place? For instance, if you are planning on contributing to a SEP (also tax deductible), when does this 20% get calculated? For the SEP, you have to calculate the 25% of Business Income for your contribution to that as well so seems fairly complicated. I was inputting projections in the Tax Act program and couldn’t find the 199A Pass Through deduction, but maybe it’s calculating it automatically.

    Also, what is the business activity code that is generally used for fantasy sports for business purposes?

  • Pbasniper

    @jeffcole1985 said...

    I suck at DFS and should most certainly give it up. I have lost way more than I have won this year. If I had to guess, I’d say I’m $10-15k in the red for 2018. Is there any benefit to claiming my losses when filing my personal return for 2018?

    You can’t claim loses gambling loses without gambling winnings. If you don’t get a tax form for winnings you can not deduct any type of loses against your normal work salary etc.

  • gordylamb

    • 699

      RG Overall Ranking

    Is it difficult to claim that you treat DFS like a business if you also have a full time job? This is my first profitable year (brag) and stumbled on the IRS definition you provided where it says you “depend on the activity for your livelihood”, which is decidedly not the case for those with a full time job but still approach the game as more than a hobby. Very generally speaking, would the approach from your end differ for the scenarios below?

    Person A – Full time job, make $100k a year, make $30k in DFS
    Person B – Full time job, make $100k in a year, make $150k in DFS

    Thanks in advance – you’re an awesome resource.

  • DFSAccounting

    @whiterock said...

    I’ve been playing since 2013. I’ve been mostly profitable, but have had a loss on sites that I never claimed on my returns. Can I go back and claim those losses?

    Depending on the years the losses were incurred, yes. You could file an amended return for those years to claim the losses.

  • DFSAccounting

    @jeffcole1985 said...

    I suck at DFS and should most certainly give it up. I have lost way more than I have won this year. If I had to guess, I’d say I’m $10-15k in the red for 2018. Is there any benefit to claiming my losses when filing my personal return for 2018?

    If you classify your DFS playing as a business, you may be able to deduct the losses.

  • DFSAccounting

    @golferdude31 said...

    Hi,

    This 20% pass through deduction is interesting and one I hadn’t considered. I’ve filed a Schedule C for Fantasy Sports the last 2-3 years and plan to again this year. When exactly does this deduction take place? For instance, if you are planning on contributing to a SEP (also tax deductible), when does this 20% get calculated? For the SEP, you have to calculate the 25% of Business Income for your contribution to that as well so seems fairly complicated. I was inputting projections in the Tax Act program and couldn’t find the 199A Pass Through deduction, but maybe it’s calculating it automatically.

    Also, what is the business activity code that is generally used for fantasy sports for business purposes?

    We’ve seen 541990 code be used.

  • DFSAccounting

    @gordylamb said...

    Is it difficult to claim that you treat DFS like a business if you also have a full time job? This is my first profitable year (brag) and stumbled on the IRS definition you provided where it says you “depend on the activity for your livelihood”, which is decidedly not the case for those with a full time job but still approach the game as more than a hobby. Very generally speaking, would the approach from your end differ for the scenarios below?

    Person A – Full time job, make $100k a year, make $30k in DFS
    Person B – Full time job, make $100k in a year, make $150k in DFS

    Thanks in advance – you’re an awesome resource.

    There are multiple criteria that lead people to treat their DFS actives as a business. We’ve developed a questionnaire to puts the IRS guidance into simple questions to determine hobby vs. business.

    https://dfsaccounting.com/tax-treatment-determination/

  • mtdurham

    @mambaland said...

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

    He’s not going to recommend breaking the law on a public message board while wearing a “CPA hat”.

    You’re obligated by law to report the income. If you don’t want to do so, it’s his professional obligation to recommend against that and explain the consequences and his best interpretation of the law as written.

    And suggesting the government has “no idea” is specious in an environment where virtually everything can be traced in an audit.

  • electrichaz3

    • 659

      RG Overall Ranking

    When can I expect fanduel to send a 1099 in the mail? Would it come in the next month or so?

  • electrichaz3

    • 659

      RG Overall Ranking

    Question guys. On fd when you go into the history tab to exports to Csv it shows a “winnings” number. Does that number reflect my gross winnings from which I would then deduct entry fees? Or is that number reflect net winnings?

    To clarify, do I take that “winnings” number and then deduct my entry fees to conclude what my net winnings are?

    Thank you all for the help you provide. Happy new year!

  • DFSAccounting

    @electrichaz3 said...

    When can I expect fanduel to send a 1099 in the mail? Would it come in the next month or so?

    Technically the 1099s are due 1/31; however, last year there was a delay in issuing the 1099s.

  • DFSAccounting

    @electrichaz3 said...

    Question guys. On fd when you go into the history tab to exports to Csv it shows a “winnings” number. Does that number reflect my gross winnings from which I would then deduct entry fees? Or is that number reflect net winnings?

    To clarify, do I take that “winnings” number and then deduct my entry fees to conclude what my net winnings are?

    Thank you all for the help you provide. Happy new year!

    From what we’ve seen, in the CSV file, there is a column for winnings and entry fees. We’ve had our clients subtract the entry fees from the winnings and that should be what DK/FD report on your 1099.

  • electrichaz3

    • 659

      RG Overall Ranking

    Understood thank you again!

  • Kappos21

    Hi guys. Thanks for taking the time to answer some questions. My question:

    In May I hit a horse bet that paid out ~ $6000. They withheld ~ $1400 for tax and issued a W2-G. It was my only time at the horse track this year. I did save my losing tickets from that day that amounted to about $2,000. The only other gambling I’ve done is DFS, and I’ve lost more than $6,000 (net) this year. Gambling would be my only itemized deduction.

    Would my DFS losses essentially make that, $1,400 witheld tax, money that is owed to me? I think my return will be about $800 if I take the standard deduction.

  • steve000

    Does anyone know how it will work tonight with the NBA main slate for tax purposes? We enter before the year ends but our accounts will not be credited until after midnight (EST) Will winnings be counted for 2018 or 2019?

  • DFSAccounting

    @Kappos21 said...

    Hi guys. Thanks for taking the time to answer some questions. My question:

    In May I hit a horse bet that paid out ~ $6000. They withheld ~ $1400 for tax and issued a W2-G. It was my only time at the horse track this year. I did save my losing tickets from that day that amounted to about $2,000. The only other gambling I’ve done is DFS, and I’ve lost more than $6,000 (net) this year. Gambling would be my only itemized deduction.

    Would my DFS losses essentially make that, $1,400 witheld tax, money that is owed to me? I think my return will be about $800 if I take the standard deduction.

    It is hard to say what your return would be without knowing the entire tax situation (i.e. other wages and taxes withheld).

    The gambling winnings/losses are treated differently than the DFS activities.

  • 0073735963

    @steve000 said...

    Does anyone know how it will work tonight with the NBA main slate for tax purposes? We enter before the year ends but our accounts will not be credited until after midnight (EST) Will winnings be counted for 2018 or 2019?

    Piggybacking as I’m curious about this too.

    Sort of related, I’m assuming no (since you could easily cancel tomorrow), but what advance entry fees for next week’s NFL? Would those entry fees reduce your 2018 taxable calculation?

    Looking at old threads, seems there’s a grey area on 12/31 and 1/1.

  • DFSAccounting

    @steve000 said...

    Does anyone know how it will work tonight with the NBA main slate for tax purposes? We enter before the year ends but our accounts will not be credited until after midnight (EST) Will winnings be counted for 2018 or 2019?

    It will all depend on how the fantasy sites report. Unfortunately, we don’t have that information. That is something that the sites would need to weigh in on.

  • DFSAccounting

    @0073735963 said...

    Piggybacking as I’m curious about this too.

    Sort of related, I’m assuming no (since you could easily cancel tomorrow), but what advance entry fees for next week’s NFL? Would those entry fees reduce your 2018 taxable calculation?

    Looking at old threads, seems there’s a grey area on 12/31 and 1/1.

    If you paid the entry fees prior to 1/1, technically they would be deductible in 2018. However, it will all depend on how the sites report those fees paid.

  • Papas1175

    I’m currently fighting with fanduel because they said they paid out at 1230 am on Jan 1 2019. This is ridiculous. My fees were paid in 2018. Now I’m losing out 35% of 10g for 2019. While I’m down for the year in 2018? How can I fight this ?

  • milizt

    • 983

      RG Overall Ranking

    DM sent

  • mkono

    My Buddy won the Yahoo Cup, $50,000. Yahoo didn’t release fund into his paypal Account until today. Would he file the $50,000 on this years return or next year?

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