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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.

  • DFSAccounting

    @moneyhungry said...

    This Question might have already been answered, Is FanDuel going to have all of their 1099s out on time this year or are they going to file for an extension again?

    Not sure about FD but we had a call with DK yesterday. They received an extension on the 1099s. We know that DK is working hard to get these out ASAP. Accurate reporting is of upmost importance to them. They do not want to rush out 1099s and then need to file a corrected 1099. This would result in headaches for everyone. We believe they will be out by mid to end of Feb.

  • DFSAccounting

    @rishipatel412 said...

    What is the best way to offset winnings from one site with losses from another? How do you file your losses if you do not have a 1099 from that site?

    Your DFS activity would need to qualify as a business in order to do this.

  • DFSAccounting

    @TheDataDetective said...

    I know that DK & FD issue 1099’s if you have net winnings > $600, but how will it work for their sportsbook sites? Does this same threshold apply or do they only report on individual bets that exceed some threshold? Thanks!

    Based on our understanding, you should receive a W-2G for sports book winning.

  • archieadams

    @DFSAccounting said...

    Not sure about FD but we had a call with DK yesterday. They received an extension on the 1099s. We know that DK is working hard to get these out ASAP. Accurate reporting is of upmost importance to them. They do not want to rush out 1099s and then need to file a corrected 1099. This would result in headaches for everyone. We believe they will be out by mid to end of Feb.

    FWIW last year in January I contacted DK via the support chat and they were very quickly able to tell me if I would be receiving a 1099 or not. I knew I was right on the bubble of $600 so that was helpful. They can’t release the 1099 that way but it could let you know whether you should be expecting one.

  • TheDataDetective

    • Blogger of the Month

    @DFSAccounting said...

    Based on our understanding, you should receive a W-2G for sports book winning.

    Everyone will or only people who meet some criteria?

  • Frolik67

    If I have won money from a site and need to pay taxes, can I use a betting site (bovada), where I have lost money (more than i have made on the site), to offset the tax?

  • gvn2fly1421

    @DFSAccounting said...

    Not sure about FD but we had a call with DK yesterday. They received an extension on the 1099s. We know that DK is working hard to get these out ASAP. Accurate reporting is of upmost importance to them. They do not want to rush out 1099s and then need to file a corrected 1099. This would result in headaches for everyone. We believe they will be out by mid to end of Feb.

    I contacted FD this morning. They are aiming to have them out by mid-February. They will also let you know if you are receiving one.

  • maxthecat

    This is what DK Sportsbook customer service sent to me on Jan. 22:

    “Form W-2G: – We will issue a W-2G form each time a player has a payout of $600 or more (no reduction for the wagered amount) and a return which is 300X the amount wagered. – We will withhold federal income tax from the winnings if the winnings minus the wager exceed $5,000 and the winnings are at least 300 times the wager.

    Form 1099-Misc: – We will report prizes and awards that are not for services performed and are not a result of a wager whose aggregate amount is $600 or greater

    If you have exceeded these amounts we will be sending you a link in regards to your W-2/1099 or mail a hard copy which is dependent on your preferences.”

    This doesn’t make sense to me though. Theoretically you could win $599 50 times and not receive any tax documentation for the year?

  • DFSAccounting

    @Frolik67 said...

    bovada

    DFS winnings and sports betting are considered different activities by the IRS. Short answer is no.

  • mambaland

    FD 1099 came via email

  • nickrock23

    The fact that these companies can’t ever get their 1099’s out on time is a pretty clear sign of improprieties. Every year from 1997-2002 I did over $1 billion worth of trades. We were a 1st year self-clearing firm after 1999, and nothing changed from Spear Leeds. Our yearly transactions dwarfed every DFS company combined. My schedule D was delivered into my building by hand truck every year by mid-January and it was exact to the penny. This was when the internet was crap too. Turbo tax existed but you couldn’t import your forms online.
    These days I am not as active but I probably executed more trades than DFS contests, yet my forms were available online mid Jan and delivered last week.
    I see companies in FD and DK who can provide your entry fees and winnings but not your 1099. Meanwhile, rinky dink outfits like FanPicks were way more professional and timely sending their 1099s.

    So, if I am an IRS officer, my line of thinking would be, why can’t these companies get theirs out in time? There really is only one explanation. If you are out there waiting for your forms, if you pay quarterly estimates and overpaid, call an IRS officer and gripe. I know a couple of these guys in town (we have an office in Edison) and they will come down on these companies, and hard. Trust me. Something is shady with these companies if they can’t add 1 + 1. If enough people complain they will be visited (physically) by these officers.

    Let’s review. DK and FD need to figure out the entries they took in minus the money they paid out (including bonuses) and that number just needs to match up with all their clients totals. ie they need Excel. This # should all be available Jan 2nd honestly. So then once that # matches all they would need to do is send the 1099 to clients whos net gains are more than $600. The fact the 2 biggest companies can’t do this simple task, is a sign that they are engaged in illegal activity. It’s not about “accurate reporting” , it’s about them making sure they cover all their bases so they aren’t exposed, which prob involves optimally allocating money to insider accounts. There is no doubt both of these companies will be fined the almost $1.1 million. Correct me if I am wrong DFSaccounting, but even if you file for an extension, aren’t you penalized $270 per form with a max of $1.1 million? At what point does the IRS call them on their BS? Honest question.

    Good luck everyone, I have been in contact with local officers because I am covering my bases. Suggest you all do the same.

  • MHDU2424

    • 440

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    @DFSAccounting said...

    DFS winnings and sports betting are considered different activities by the IRS. Short answer is no.

    What about for DraftKings in NJ specifically? The bankroll is shared between Their Sportsbook and DFS sites

    Thanks

  • scott33

    @mambaland said...

    FD 1099 came via email

    Saw your post, was hoping I wouldn’t get one. There it was

  • DFSAccounting

    @Frolik67 said...

    If I have won money from a site and need to pay taxes, can I use a betting site (bovada), where I have lost money (more than i have made on the site), to offset the tax?

    Yes you can use any gambling loss to offset your gambling winnings. Up to your gambling winnings. You can’t report more losses than winnings.

  • DFSAccounting

    @nickrock23 said...

    The fact that these companies can’t ever get their 1099’s out on time is a pretty clear sign of improprieties. Every year from 1997-2002 I did over $1 billion worth of trades. We were a 1st year self-clearing firm after 1999, and nothing changed from Spear Leeds. Our yearly transactions dwarfed every DFS company combined. My schedule D was delivered into my building by hand truck every year by mid-January and it was exact to the penny. This was when the internet was crap too. Turbo tax existed but you couldn’t import your forms online.
    These days I am not as active but I probably executed more trades than DFS contests, yet my forms were available online mid Jan and delivered last week.
    I see companies in FD and DK who can provide your entry fees and winnings but not your 1099. Meanwhile, rinky dink outfits like FanPicks were way more professional and timely sending their 1099s.

    So, if I am an IRS officer, my line of thinking would be, why can’t these companies get theirs out in time? There really is only one explanation. If you are out there waiting for your forms, if you pay quarterly estimates and overpaid, call an IRS officer and gripe. I know a couple of these guys in town (we have an office in Edison) and they will come down on these companies, and hard. Trust me. Something is shady with these companies if they can’t add 1 + 1. If enough people complain they will be visited (physically) by these officers.

    Let’s review. DK and FD need to figure out the entries they took in minus the money they paid out (including bonuses) and that number just needs to match up with all their clients totals. ie they need Excel. This # should all be available Jan 2nd honestly. So then once that # matches all they would need to do is send the 1099 to clients whos net gains are more than $600. The fact the 2 biggest companies can’t do this simple task, is a sign that they are engaged in illegal activity. It’s not about “accurate reporting” , it’s about them making sure they cover all their bases so they aren’t exposed, which prob involves optimally allocating money to insider accounts. There is no doubt both of these companies will be fined the almost $1.1 million. Correct me if I am wrong DFSaccounting, but even if you file for an extension, aren’t you penalized $270 per form with a max of $1.1 million? At what point does the IRS call them on their BS? Honest question.

    Good luck everyone, I have been in contact with local officers because I am covering my bases. Suggest you all do the same.

    The penalty is $270 per form if they don’t send out a 1099-misc by August of this year. We know Dk applied for an extension and are working to prepare accurate 1099-misc for their users. We suggest all taxpayers wait for their 1099-misc before filing their tax return.

  • DFSAccounting

    @MHDU2424 said...

    What about for DraftKings in NJ specifically? The bankroll is shared between Their Sportsbook and DFS sites

    Thanks

    Even though the bankroll is shared between sites, DK will report each activity separately.

  • Frolik67

    I’m confused, because your first answer was No, that they are separate activities and I cant use it, but then your second answer is yes, I can use gambling loses to offset gambling winnings. So im not sure which is right

  • DFSAccounting

    @Frolik67 said...

    I’m confused, because your first answer was No, that they are separate activities and I cant use it, but then your second answer is yes, I can use gambling loses to offset gambling winnings. So im not sure which is right

    Yes. You can use gambling losses to offset gambling winnings. Our apologies. We thought you were asking if you can use gambling losses to offset DFS winnings.

    Thank you

  • Frolik67

    I meant can i use Bovada to offset DFS winnings from Fanduel, so then youre saying I cannot?

  • Frolik67

    I still live at home most of the year, so would I be considered a dependent? I am in college, but still rely on my parents. What do i need to do with the forms if I am considered a dependent?

  • mambaland

    the obvious answer is fanduel is not gambling but we will see what the experts say…FD 1099 came already

  • mambaland

    @scott33 said...

    Saw your post, was hoping I wouldn’t get one. There it was

    i am afraid to open mine as they are known to screw up

  • DFSAccounting

    @Frolik67 said...

    I meant can i use Bovada to offset DFS winnings from Fanduel, so then youre saying I cannot?

    No. Gambling is considered a different type of activity from DFS.

  • DFSAccounting

    @Frolik67 said...

    I still live at home most of the year, so would I be considered a dependent? I am in college, but still rely on my parents. What do i need to do with the forms if I am considered a dependent?

    If you receive tax forms, you need to file and income tax return,

  • maxthecat

    The “full transaction history” excel document that DK sends you for Sportsbook upon request has individual rows for each bet and individual rows for each payout with separate transaction IDs. Basically, one cannot tell which bet ended in a loss or ended in a win. Does this matter? Would each bet/wager be considered a gambling “loss” regardless if that bet turned out to profitable or not, while all total winnings would be reported?

    For example, If I made only one bet the entire year and a $4,000 bet resulted in me winning $4,500 (a $500 profit), would I say my “winnings” were $4,500 and my “losses” were $4,000? If I cannot report the bet/wager itself as a loss, then I would be taxed way more than what I profited. Any understanding of this would be very helpful.

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