INDUSTRY FORUM

Comments

  • PJGuin23

    DFS Tax Guru

    As many or some of you may know, I have a tax practice specializing in Daily Fantasy Sports participants. My site is Daily Fantasy Taxes, and I can make your DFS filing simple & easy if you are looking for help. I have a partnership with RotoGrinders to offer DFS Tax Services to the RG Community. I am a CPA and have DFS clients along with other industries such as Horse Racing (DFS similarities on Hobby-Business), Construction and Services. I met some of you in New York last November and had a blast! I was told all tax related posts would be kept to this thread. Alternatively you can read my Tax article here My rates are reasonable and I have e-filing. We can work over the phone or by e-mail, whichever you prefer.

    Note: I have a fax and a Secure Web Portal to exchange files if needed.

    Last piece of advice, wait to file your return if you have FanDuel or DraftKings income.

    So without further adieu, let’s get the DFS Tax General Q&A going……..ask away!

    PJGuin23’s Disclaimer: I am a Certified Public Accountant licensed by the Commonwealth of Pennsylvania. Any information provided is for informational purposes only and is not intended to substitute for obtaining accounting, tax, or financial advice from a professional accountant, CPA, lawyer or other competent financial professional. Presentation of information I provide on RotoGrinders does not constitute an accountant-client relationship. Such relationship can be established by engaging in professional services privately with PJGuin23. RotoGrinders readers are advised not to act upon information I provide without seeking the service of a professional accountant well versed in your particular situation.

    • Link
    • Last Updated 4 years ago
  • Stewburtx8

    • 2012 FanDuel WFBC Finalist

    @jess8328 said...

    How are you taxed if you win a spot to the fantasy baseball world championship?

    “Each package ($29,700 value) includes an FBWC Ticket PLUS a three-night (Aug. 25th-28th) trip to Toronto and $1,200 cash for airfare and transfers.”

    Do you have to pay tax on $29.7k + $1.2k? Where does that $29.7k figure come from anyways?

    You will only owe tax on what you actually cash for at the live event (plus cash for airfare and transfers).

    The $29,700 is just the value of the ticket. So for example, the DK fantasy baseball championship pays out $4 million and has 160 participants. So just take $4MM divided by 160 and the value of the ticket is $25,000.

    But if you qualify and finish 150th, you cash for $5,000. You will only be taxed on the $5,000 (plus the $1200).

  • PJGuin23

    DFS Tax Guru

    Reminder, today is the last day to file your Federal Tax return along with most states.

    I also like to thank RG for allowing me the privilege to offer my services on this Forum along with many great new clients I acquired from this community. I’m around all year and say you win a large GPP, feel free to contact me for Tax Estimates so you don’t get shocked with a large bill come next year. There will be few moments I don’t have access and that includes vacation!

    Hopefully the legal aspect of DFS gets cleared up soon so we can all better plan for what’s next and get the prize pools back up. As for Pennsylvania, I will try to keep everyone posted. There maybe a favorable bill in the works so we shall see what happens there.

  • PJGuin23

    DFS Tax Guru

    @Stewburtx8 said...

    You will only owe tax on what you actually cash for at the live event (plus cash for airfare and transfers).

    The $29,700 is just the value of the ticket. So for example, the DK fantasy baseball championship pays out $4 million and has 160 participants. So just take $4MM divided by 160 and the value of the ticket is $25,000.

    But if you qualify and finish 150th, you cash for $5,000. You will only be taxed on the $5,000 (plus the $1200).

    Stand corrected. I meant to say what was cashed. This requires follow up questions. Basically what was won less what was originally paid to win that.

    Sats and tickets can be confusing for people.

  • NESBears120

    Just wondering to make sure i didnt screw my taxes up, but you only report what you withdrew correct???

  • PJGuin23

    DFS Tax Guru

    @NESBears120 said...

    Just wondering to make sure i didnt screw my taxes up, but you only report what you withdrew correct???

    No, what was Earned.

  • NESBears120

    @PJGuin23 said...

    No, what was Earned.

    Im glad those numbers were the same this year i made and withdrew $500 but thanks because now i know for next year

  • sethayates

    This isn’t DFS related, but if you don’t mind could you settle an argument for me? I know a lot of people who claim to know someone who gets a $10,000 tax return every year. This bugs the crap out of me. These people getting a $10K return are always painted as leeching off the system. The reality is they didn’t get $10K, the absolute most you could get is $6242 from the EITC.

    As an example, let’s say we are talking about someone in the military who deploys for several months. They have 3 kids. Their W2 shows $14,800 which is where the EITC maxes out at $6240

    https://www.irs.gov/publications/p596/ar02.html

    If said person does Married Filining jointly their standard deduction is $16,000 ($6300 self and spouse, $1000 per child x3). Said person would have $0 tax liability. They’d get back $6,240 plus any taxes they paid in.

    If they somehow get a $10,000 return it’s because they ridiculously overpaid their taxes.

    Is there any scenario where a person gets a $10K return where the entire $10K is money they didn’t pay in? My argument is if somehow they got $10K then about 40% of it was their own money.

  • myb821

    @seth one of the education credits is up to 2k refundable. It is possible that there are other refundable credits i dont know about.

  • PJGuin23

    DFS Tax Guru

    Not only Education but Additional Child Tax Credit for $1,000. And yes, a single mom could parlay some EITC, Education and ACTC for a nice chunk of “Negative” Tax. I’ve seen cases where it can be 1/2 of AGI.

    Poverty can be a lucrative industry as a tax preparer. Unfortunately I do not offer RALs.

  • PJGuin23

    DFS Tax Guru

    But as a registered Democrat, which many people find odd being that I’m a clean cut CPA who plays golf, you could make the argument poorer people have to pay a higher portion of their income in Sales, Payroll and Excise taxes.

    You can shoot those foaming at the mouth “We are the 53%” conservatives quite easily. Granted there are some on assistance including EITC who don’t use it for intended purposes but greater frauds are out there than the welfare recipient who buys steak.

  • sethayates

    @PJGuin23 said...

    Not only Education but Additional Child Tax Credit for $1,000. And yes, a single mom could parlay some EITC, Education and ACTC for a nice chunk of “Negative” Tax. I’ve seen cases where it can be 1/2 of AGI.

    Poverty can be a lucrative industry as a tax preparer. Unfortunately I do not offer RALs.

    Makes sense. I guess I didn’t do enough research on additional child credit. Seems like that could get you there.

  • PJGuin23

    DFS Tax Guru

    @sethayates said...

    Makes sense. I guess I didn’t do enough research on additional child credit. Seems like that could get you there.

    Reason why I said it can be lucrative is people want their $$$ and want it now. They don’t care about the 443% (no misprint) APR to get their hands on it.

    Have you also heard HR Block and the AICPA are at war again? I fume at those commercials every tax season.

  • Capri

    As DFS players, should we be paying quarterly estimated taxes?

  • whodat2

    Haven’t read the whole thread so sorry if it has already been answered.

    Let say I win enough on one site that I get issued a 1099. But on another site I lose more than the winnings on the other site. How does that work?

  • PJGuin23

    DFS Tax Guru

    @Capri said...

    As DFS players, should we be paying quarterly estimated taxes?

    Depends on how much you’re winning and tax bracket you’re in.

  • PJGuin23

    DFS Tax Guru

    @whodat2 said...

    Haven’t read the whole thread so sorry if it has already been answered.

    Let say I win enough on one site that I get issued a 1099. But on another site I lose more than the winnings on the other site. How does that work?

    Depends on whether you are Amateur or Professional. You can’t just “Net the 2” per se

  • barnstorm

    How about Sports Arbitrage?

    Do I have to report all my winnings and all my losses or can I net them? With arbitrage, I have placed large wagers on both sides just to win $10-15. I’ve netted $10,000 in income for the year, but I will have hundreds of thousands of dollars of wins and losses. I’m concerned it will throw up a big red flag to have hundreds of thousands of dollars of wins and losses this year after minimal income for the past few years.

    I’m retired and it is my only income, and more than a hobby as I rely on it. I studied to get good at it and work hard at it, so I’m pretty sure I can do Schedule C, but then there is the 15% Self Employment tax. I will get some back on EIC.

    I believe each game where I have a wager on both sides could be considered a Session and therefore I could net the result.

    In DFS, couldn’t a player consider 20 entries at $10 each for the day’s games to be a Session and therefore he could net the result of those 20 entries?

    Thanks!

    • Link
    • Last Updated 4 years ago
  • BradfordEra

    I have a question. Lets say I win $700 for example on Fanduel and don’t withdraw any of it. I have a string of bad luck and lose all of it. Am I liable to owe anything on my taxes? I don’t think that I am but I’m just curious.

    Thanks in Advance!

    • Link
    • Last Updated 5 years ago
  • Stewburtx8

    • 2012 FanDuel WFBC Finalist

    @BradfordEra said...

    I have a question. Lets say I win $700 for example on Fanduel and don’t withdraw any of it. I have a string of bad luck and lose all of it. Am I liable to owe anything on my taxes? I don’t think that I am but I’m just curious.

    Thanks in Advance!

    If you lose it all in the same tax year, no you would not owe anything. If you have $700 profit on 12/31 but then lose it all on 1/1, you would owe tax on the $700 for that tax year that ended 12/31.

  • Stewburtx8

    • 2012 FanDuel WFBC Finalist

    @barnstorm said...

    How about Sports Arbitrage?

    Do I have to report all my winnings and all my losses or can I net them? With arbitrage, I have placed large wagers on both sides just to win $20. I’ve netted $10,000 in income, but I will have hundreds of thousands of dollars of wins and losses.

    I’m retired and it is my only income, and more than a hobby as I rely on it, so I’m pretty sure I can do Schedule C, but then there is the 15% Self Employment tax. Maybe I get some back on EIC. I’m not on SS yet.

    What are the consequences if I just declare the winnings as Misc. Income and Itemize the losses? I’m concerned it will throw up a big red flag to have hundreds of thousands of dollars of wins and losses this year after minimal income for the past few years.

    And if my state (West Virginia) doesn’t allow deduction of losses, I’m screwed? Or will Schedule C be the way to go in that case?

    Thanks!

    I would send PJGuin23 an private message here or contact him on Twitter at the same handle. You will almost definitely go the Schedule C route but he can help you out. At $10,000 you will not really have taxable income but you would owe self-employment tax.

  • WidumBoise

    So tomorrow 12/30 we should expect a lot of players to be playing higher volume than normal to try to reduce their taxable income for the year? How can we take advantage of this? Should we play more if we are up big on the year?

  • bolu

    They won’t try and lose money to reduce taxable income

  • BradfordEra

    Yea I am a special case. I didn’t lose all the money I won this year to reduce my taxable income lol I lost because I went a little crazy with my entering of contests. Don’t do what I did.

  • bolu

    I have a question regarding Bitcoin gambling if anyone wants to chime in. It’s hypothetical. Are there extra records, in addition to the usual records for income, to keep when the sportsbook only handles transactions in Bitcoin?
    I’m thinking about depositing to a Bitcoin sportsbook but am concerned about possible extra recordkeeping regarding the value of the Bitcoins and lots of lines on form 8949.

    For example,
    I deposit to a Bitcoin sportsbook.
    Account balances and bet records are only listed in bitcoins.
    Any time you win a bet, record the fair market value in dollars of the bitcoins won to help determine capital gains/losses that happen when you get rid of the coins. That’s an extra step involving a conversion rate that doesn’t happen in a dollar sportsbook.
    The extra record when you lose a bet would be converting the value of the bitcoins lost to dollars. So if I lost 1 bitcoin when they are worth $500, use $500 and compare that to cost basis for capital gains purposes.

  • lionssuck

    @bolu said...

    I have a question regarding Bitcoin gambling if anyone wants to chime in. It’s hypothetical. Are there extra records, in addition to the usual records for income, to keep when the sportsbook only handles transactions in Bitcoin?
    I’m thinking about depositing to a Bitcoin sportsbook but am concerned about possible extra recordkeeping regarding the value of the Bitcoins and lots of lines on form 8949.

    For example,
    I deposit to a Bitcoin sportsbook.
    Account balances and bet records are only listed in bitcoins.
    Any time you win a bet, record the fair market value in dollars of the bitcoins won to help determine capital gains/losses that happen when you get rid of the coins. That’s an extra step involving a conversion rate that doesn’t happen in a dollar sportsbook.
    The extra record when you lose a bet would be converting the value of the bitcoins lost to dollars. So if I lost 1 bitcoin when they are worth $500, use $500 and compare that to cost basis for capital gains purposes.

    A) (I’m assuming the sportsbook is outside of the united states) I highly doubt they would send you a 1099.

    B) Assuming that the sportsbook was outside the united states, I would also assume that it is illegal to bet at an overseas sportsbook, so reporting income to the IRS from an illegal activity would open up a whole other can of worms. JMO

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

Subforum Index

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.

If you or someone you know has a gambling problem, crisis counseling and referral services can be accessed by calling 1-800-GAMBLER (1-800-426-2537) (IL). Gambling problem? Call 1-800-GAMBLER (NJ/WV/PA/MI), 1-800-9-WITH-IT (IN), 1-800-522-4700 (CO), 1-800-BETS OFF (IA), 1-888-532-3500 (VA) or call/text TN REDLINE 1-800-889-9789 (TN).