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Taxes (1 Viewer)

(HULK)

(HULK)

(Smash)
So, I know this is a good problem to have, but I'm going to end up paying taxes on my winnings this year. A couple questions:

-If I don't withdraw until after Jan 1, that won't save me from paying the taxes this year, will it?

-I won enough to alert the tax man on Yahoo and Starsdraft. I also have a loss on Fanduel. Is there some required document for that loss (or can I just list it without any supporting evidence)?

-Is other gambling allowed to be a write off against this? Say I went to the casino and lost a couple grand, could I use that to offset this win? (I haven't, but there is still time to go to a casino this year). 2nd part, how is this documented?

 
Not sure about the rest, but I know when you withdraw doesn't affect the taxes. Once it's in your account, technically it's in your possession.

 
(HULK) said:
So, I know this is a good problem to have, but I'm going to end up paying taxes on my winnings this year. A couple questions:

-If I don't withdraw until after Jan 1, that won't save me from paying the taxes this year, will it?

-I won enough to alert the tax man on Yahoo and Starsdraft. I also have a loss on Fanduel. Is there some required document for that loss (or can I just list it without any supporting evidence)?

-Is other gambling allowed to be a write off against this? Say I went to the casino and lost a couple grand, could I use that to offset this win? (I haven't, but there is still time to go to a casino this year). 2nd part, how is this documented?
Click to expand...
  • You have to pay taxes on your balances as of January 1st, no matter what. The site(s) will send you a 1099 that reflects your earnings (winnings minus deposits) if the amount is over $600. If it's less than $600, you're on your own.
  • If you have losses on other sites, you can subtract those losses from your winnings to lessen your overall tax burden due to DFS profits. You do, however, need to supply paperwork (i.e., PayPal, bank, credit card deposit receipts) to substantiate those claims...if you don't, you're dramatically increasing your likelihood of an audit.
  • Since DFS income is not considered 'gambling,' you cannot lump those losses into your DFS taxes...they're completely different animals in the eyes of the IRS.
**NOTE: I am not a CPA, nor a tax-advisor. The information I've shared is based on multiple years of success in DFS and having asked similar questions to my CPA; what I have explained above is what I have been told by people I trust. You should definitely defer to your own CPA to ensure that you are doing your own taxes correctly and not putting yourself in the crosshairs of the IRS.**

 
John Lee said:
(HULK) said:
So, I know this is a good problem to have, but I'm going to end up paying taxes on my winnings this year. A couple questions:

-If I don't withdraw until after Jan 1, that won't save me from paying the taxes this year, will it?

-I won enough to alert the tax man on Yahoo and Starsdraft. I also have a loss on Fanduel. Is there some required document for that loss (or can I just list it without any supporting evidence)?

-Is other gambling allowed to be a write off against this? Say I went to the casino and lost a couple grand, could I use that to offset this win? (I haven't, but there is still time to go to a casino this year). 2nd part, how is this documented?
Click to expand...
  • You have to pay taxes on your balances as of January 1st, no matter what. The site(s) will send you a 1099 that reflects your earnings (winnings minus deposits) if the amount is over $600. If it's less than $600, you're on your own.
  • If you have losses on other sites, you can subtract those losses from your winnings to lessen your overall tax burden due to DFS profits. You do, however, need to supply paperwork (i.e., PayPal, bank, credit card deposit receipts) to substantiate those claims...if you don't, you're dramatically increasing your likelihood of an audit.
  • Since DFS income is not considered 'gambling,' you cannot lump those losses into your DFS taxes...they're completely different animals in the eyes of the IRS.
**NOTE: I am not a CPA, nor a tax-advisor. The information I've shared is based on multiple years of success in DFS and having asked similar questions to my CPA; what I have explained above is what I have been told by people I trust. You should definitely defer to your own CPA to ensure that you are doing your own taxes correctly and not putting yourself in the crosshairs of the IRS.**
Click to expand...
This is my general understanding and what my accountant did for my taxes last year. I funnel everything fantasy-sports related through my Paypal account and use it for only fantasy sports. It makes record-keeping much easier and cleaner.

 
Darn, I was hoping to *wash* some this at the casino.

Oh well, looks like Uncle Sam takes the biggest rake of all.

 
I wonder if I entered ALL of my funds into play beginning Thursday Dec 31st and ending Monday Jan 4th if that would work?

 
Seriously go talk to an accountant. A few hundred bucks is not worth the risk of the hassle of an audit. My own opinion is that winnings currently entered into a contest wouldn't show up on the 1099. I assume they take current balance, subtract deposits and that's what's on the 1099. Asking customer service should answer that though

 
NixonMask said:
Seriously go talk to an accountant. A few hundred bucks is not worth the risk of the hassle of an audit. My own opinion is that winnings currently entered into a contest wouldn't show up on the 1099. I assume they take current balance, subtract deposits and that's what's on the 1099. Asking customer service should answer that though
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I'm not sure I want to do that, but I'll ask.

It won't even be possible on Starsdraft to get that much money into play.

 
Thank you for contacting FanDuel Customer Support!

We are required to obtain tax information and send out a 1099 form to users who have earned a net profit of $600 or more on the year.

To help you understand how we calculate net profit an explanation is provided below:

Net Profits are essentially the total of money won on the site minus the total of all entry fees. Money won includes bonuses (only counted as the pending bonus money is released into the cash account) and entry fees paid for in FanDuel Points (FDP) are not counted as part of the total entry fees. It is also important to note that deposits and withdrawals are irrelevant to the calculation.

Here is an example of what the equation would look like:

(Net Profit = Prize Winnings - Entry Fees + Bonuses + FDP Entries)

If you would ever like to calculate your net profit yourself, the best way to get an estimate would be to go to the History tab, and you should be able to download a CSV file of all of your winnings and entry fees (be sure to exclude any entry fees that were canceled or voided).

Please let us know if you have any other questions, and we will be happy to assist you further.

Happy Holidays,
Sebastian

Thank you for playing!

 
NixonMask said:
Fanduel customer support does
Click to expand...
They didn't say that explicitly in their stock response, but it can clearly be implied. Regardless, they aren't the final word on the issue.

Conceptually, if the IRS ever looked into it I think you would get hammered for 2 reasons:

1. Trying to "roll over" that income would allow you to start the year with a huge income that was actually earned and realized in 2015, not 2016 -- something that the IRS typically frowns upon; and (more importantly IMO)

2. It would allow you to have a starting positive income to deduct 2016 losses from to offset your hobby income -- typically you can't roll hobby losses forward or backward to offset hobby income AND you can't use hobby losses to offset regular income. That would allow you to potentially reduce your tax obligation to the IRS, not just defer it.

Obviously you would need to consult with your accountant on such things, and if the site didn't 1099 you on the income that was entered at the end of the year the IRS might never be aware of it. But I'm a firm believer in never doing anything that makes the IRS aware of your existence, and I have a very sneaky suspicion that the IRS is going to be paying very close attention to the DFS sites this year. An audit on the site side would uncover it for lots of users (assuming the IRS believes it should be treated as 2015 hobby income), so you don't just have to think about the odds of you getting audited, but also the site. Even if they don't clip you for penalties, a 10% interest float is a tough pill to swallow in the current environment.

 
I completely agree. The IRS does not have a sense of humor, but current contest entries are explicitly stated as being deducted from your winnings for the year. I wouldn't run 1000% extra entries to get under $600 for the year and then cancel all of it on 1/1, but even something like double is "reasonable" as long as you're not cancelling all of it. Typically I cancel about 10% of the contests I'm in just to improve game selection. Some weeks more, some alot less. If you never cancel entries though its alot harder to defend. Eventually you're paying taxes on it anyway though unless you go broke, might as well get it out of the way.

 
NixonMask said:
I completely agree. The IRS does not have a sense of humor, but current contest entries are explicitly stated as being deducted from your winnings for the year. I wouldn't run 1000% extra entries to get under $600 for the year and then cancel all of it on 1/1, but even something like double is "reasonable" as long as you're not cancelling all of it. Typically I cancel about 10% of the contests I'm in just to improve game selection. Some weeks more, some alot less. If you never cancel entries though its alot harder to defend. Eventually you're paying taxes on it anyway though unless you go broke, might as well get it out of the way.
Click to expand...
I think it might be easier to defend if it was being treated as business income instead of hobby income, since you can roll losses forward and backward anyway. Regardless, my approach with the IRS has always been to avoid any situation that includes the rationalization of "they'll never know anyway, so I'm going to do it". I might screw something up along the way, but it will always be an honest mistake.

 
NixonMask said:
I completely agree. The IRS does not have a sense of humor, but current contest entries are explicitly stated as being deducted from your winnings for the year. I wouldn't run 1000% extra entries to get under $600 for the year and then cancel all of it on 1/1, but even something like double is "reasonable" as long as you're not cancelling all of it. Typically I cancel about 10% of the contests I'm in just to improve game selection. Some weeks more, some alot less. If you never cancel entries though its alot harder to defend. Eventually you're paying taxes on it anyway though unless you go broke, might as well get it out of the way.
Click to expand...
Oh, I wasn't saying to cancel it after the 31st. But there's an idea.

 
(HULK) said:
NixonMask said:
I completely agree. The IRS does not have a sense of humor, but current contest entries are explicitly stated as being deducted from your winnings for the year. I wouldn't run 1000% extra entries to get under $600 for the year and then cancel all of it on 1/1, but even something like double is "reasonable" as long as you're not cancelling all of it. Typically I cancel about 10% of the contests I'm in just to improve game selection. Some weeks more, some alot less. If you never cancel entries though its alot harder to defend. Eventually you're paying taxes on it anyway though unless you go broke, might as well get it out of the way.
Click to expand...
Oh, I wasn't saying to cancel it after the 31st. But there's an idea.
Click to expand...
I think that would invite penalties if the IRS viewed it as income from 2015. I firmly believe there is a different analysis between "money entered in a contest that hasn't started that I can pull out any time I want" and "money entered in a contest that has started and I can't pull it out" as of midnight on 12/31. In the latter you could at least say that the money was placed at risk and was no longer "your" money, the former is just another account to store your cash in.

 
If youre playing your regular amount of games and you dont cancel any of the entries youll be fine (again see an accountant, Im just a random guy that is just giving the IRS what they want). I was under the impression you were planning on entering and canceling as a way to avoid reporting for a year. TennesseATO is right, The IRS likely is going to be looking at people and Im not giving them any reason to make it me, but if youre operating in good faith theyll have plenty of other people theyre far more concerned with.

 
NixonMask said:
If youre playing your regular amount of games and you dont cancel any of the entries youll be fine (again see an accountant, Im just a random guy that is just giving the IRS what they want). I was under the impression you were planning on entering and canceling as a way to avoid reporting for a year. TennesseATO is right, The IRS likely is going to be looking at people and Im not giving them any reason to make it me, but if youre operating in good faith theyll have plenty of other people theyre far more concerned with.
Click to expand...
I work in Federal budget and the IRS is severely underfunded and undermanned. Audit risk is greatly overstated imo.

That said, I was considering going "all-in" on week 17, as opposed to committing, then de-committing the money. I've emailed Yahoo to see what they say about it. One thing to consider, if there is nothing for Yahoo to report, there is no jumping up on the radar of the IRS anyways.

 
Yeah, I dont know what Yahoo is doing, but they havent asked for a W9 from me yet. Their DFS department feels like a bunch of bros that dont really know/care what theyre doing.

 
(HULK) said:
NixonMask said:
If youre playing your regular amount of games and you dont cancel any of the entries youll be fine (again see an accountant, Im just a random guy that is just giving the IRS what they want). I was under the impression you were planning on entering and canceling as a way to avoid reporting for a year. TennesseATO is right, The IRS likely is going to be looking at people and Im not giving them any reason to make it me, but if youre operating in good faith theyll have plenty of other people theyre far more concerned with.
Click to expand...
I work in Federal budget and the IRS is severely underfunded and undermanned. Audit risk is greatly overstated imo.

That said, I was considering going "all-in" on week 17, as opposed to committing, then de-committing the money. I've emailed Yahoo to see what they say about it. One thing to consider, if there is nothing for Yahoo to report, there is no jumping up on the radar of the IRS anyways.
Click to expand...
My thinking isn't that the IRS would look at you, it's that the IRS will look at one or more of the DFS companies. It's a whole lot easier, and cost-effective, to identify issues with reporting income on the company side.

 
NixonMask said:
Fanduel customer support does
Click to expand...
I disagree.

They didn't give a complete explanation. They left out a full discussion of that point. But they told you how to figure out your taxable income -- by going to the history tab.

The history tab only shows entry fees for contests that have been completed. If you pay an entry fee on Dec 30 and get paid your winnings on January 2, the entry fee will not show up in your history tab as of December 31.

I suspect that's how they generate the information for 1099s -- basically, by running a report as of the end of the year based on your history tab for contests that end during the relevant calendar year.

 
(HULK) said:
NixonMask said:
If youre playing your regular amount of games and you dont cancel any of the entries youll be fine (again see an accountant, Im just a random guy that is just giving the IRS what they want). I was under the impression you were planning on entering and canceling as a way to avoid reporting for a year. TennesseATO is right, The IRS likely is going to be looking at people and Im not giving them any reason to make it me, but if youre operating in good faith theyll have plenty of other people theyre far more concerned with.
Click to expand...
I work in Federal budget and the IRS is severely underfunded and undermanned. Audit risk is greatly overstated imo.

That said, I was considering going "all-in" on week 17, as opposed to committing, then de-committing the money. I've emailed Yahoo to see what they say about it. One thing to consider, if there is nothing for Yahoo to report, there is no jumping up on the radar of the IRS anyways.
Click to expand...
As a CPA and an i-friend, I was going to offer help guidance here, but comments like this make me kinda wary, tbh.

 
(HULK) said:
Welp, heard from Yahoo. They're not issuing 990s at all.
Click to expand...
I'm assuming you meant a 1099??

If so, can you copy/paste the email here? I would be floored if Yahoo didn't issue 1099's...and it would be the next firestorm in DFS if state/federal governments discovered that a major site like Yahoo wasn't doing so. I hope you really did mean a 990 form (which wouldn't make sense)...

 
John Lee said:
(HULK) said:
Welp, heard from Yahoo. They're not issuing 990s at all.
Click to expand...
I'm assuming you meant a 1099??

If so, can you copy/paste the email here? I would be floored if Yahoo didn't issue 1099's...and it would be the next firestorm in DFS if state/federal governments discovered that a major site like Yahoo wasn't doing so. I hope you really did mean a 990 form (which wouldn't make sense)...
Click to expand...
Agreed. Issuing a 1099 isn't up to the sites. The gub'mint requires it.

 
John Lee said:
(HULK) said:
Welp, heard from Yahoo. They're not issuing 990s at all.
Click to expand...
I'm assuming you meant a 1099??

If so, can you copy/paste the email here? I would be floored if Yahoo didn't issue 1099's...and it would be the next firestorm in DFS if state/federal governments discovered that a major site like Yahoo wasn't doing so. I hope you really did mean a 990 form (which wouldn't make sense)...
Click to expand...
I meant 1099. Just crossed some wires since I volunteer for a non-profit.

Here is the email:

Hi Real-Name-Removed-From-Paste-Just-Imagine-It-Says-Hulk,

Thank you for contacting Sports.

It's your responsibility to report any Yahoo Sports Daily Fantasy total winnings you receive over $600 to the Internal Revenue Service.

Yahoo will not be issuing 1099 forms.

For more information, visit the Yahoo Sports Daily Fantasy Official Rules.

I hope I have addressed and understood your inquiry. If not, or if you still have questions, please don't hesitate to reply to this email and we will gladly assist you again.

Warm regards,

Ralf

Yahoo Customer Care

http://help.yahoo.com
Click to expand...
FYI, the link he provided offers no insight into the tax situation whatsoever.

 
I emailed back and asked if they were reporting winnings to the IRS at all. And how they calculate that. Without a 1099, it is hard to know what to claim, especially if we don't know the calculation.

 
(HULK) said:
John Lee said:
(HULK) said:
Welp, heard from Yahoo. They're not issuing 990s at all.
Click to expand...
I'm assuming you meant a 1099??

If so, can you copy/paste the email here? I would be floored if Yahoo didn't issue 1099's...and it would be the next firestorm in DFS if state/federal governments discovered that a major site like Yahoo wasn't doing so. I hope you really did mean a 990 form (which wouldn't make sense)...
Click to expand...
I meant 1099. Just crossed some wires since I volunteer for a non-profit.

Here is the email:

Hi Real-Name-Removed-From-Paste-Just-Imagine-It-Says-Hulk,

Thank you for contacting Sports.

It's your responsibility to report any Yahoo Sports Daily Fantasy total winnings you receive over $600 to the Internal Revenue Service.

Yahoo will not be issuing 1099 forms.

For more information, visit the Yahoo Sports Daily Fantasy Official Rules.

I hope I have addressed and understood your inquiry. If not, or if you still have questions, please don't hesitate to reply to this email and we will gladly assist you again.

Warm regards,

Ralf

Yahoo Customer Care

http://help.yahoo.com
Click to expand...
FYI, the link he provided offers no insight into the tax situation whatsoever.
Click to expand...
Is Yahoo! operating their DFS in an off-shore company? If so, they won't be required to provide 1099s. Otherwise, I don't know why they think they aren't obligated to file them, since the IRS pretty explicitly requires them for the payment of "prizes and awards" totaling more than $600 for the year.

 
What is Yahoo thinking? Or who did they contract to run it for them? So epicly stupid considering recent events

 
NixonMask said:
What is Yahoo thinking? Or who did they contract to run it for them? So epicly stupid considering recent events
Click to expand...
I'm just going to assume that whatever company Yahoo uses to house the DFS operation isn't based in the US. It's the only thing that remotely makes any sense.

 
Should I delete this thread. I'd hate to cause this industry more pain.

I do have a request for more information in, it has not been responded to yet.

Ralf isn't a common American name, I could see it being an offshore thing.

 
(HULK) said:
Should I delete this thread. I'd hate to cause this industry more pain.

I do have a request for more information in, it has not been responded to yet.

Ralf isn't a common American name, I could see it being an offshore thing.
Click to expand...
There is absolutely no requirement for a non-US company to submit 1099s that I'm aware of because they don't turn around and deduct the outflow of that money with an IRS filing. I really don't think it's a big deal at all if they are off-shore and not providing 1099s. It doesn't change your obligations to report the income. As far as how much you made from their site, the IRS couldn't care less if the site doesn't calculate it for you. They expect you to calculate it.

 
NixonMask said:
Yahoo is based in Sunnyvale, ca. They're just ignoring reporting requirements.
Click to expand...
That's where the Yahoo headquarters is located, and I'm sure many of their enterprises are US-based companies. That does not mean that all of their companies are located in the US though.

 
(HULK) said:
Thank you for contacting Sports.

It's your responsibility to report any Yahoo Sports Daily Fantasy total winnings you receive over $600 to the Internal Revenue Service.

Yahoo will not be issuing 1099 forms.
Click to expand...
Among the other reasons this is weird, it should say "over $0" rather than "over $600."

 
Yahoo DFS feels like an executive hired their idiot nephew to run the hot new thing no one with any responsibility understood. That nephew went online to research 1099s and saw they're only responsible for generating when someone reaches $600 and thought, nah I don't want to bother with calculating that.

 
John Lee said:
(HULK) said:
So, I know this is a good problem to have, but I'm going to end up paying taxes on my winnings this year. A couple questions:

-If I don't withdraw until after Jan 1, that won't save me from paying the taxes this year, will it?

-I won enough to alert the tax man on Yahoo and Starsdraft. I also have a loss on Fanduel. Is there some required document for that loss (or can I just list it without any supporting evidence)?

-Is other gambling allowed to be a write off against this? Say I went to the casino and lost a couple grand, could I use that to offset this win? (I haven't, but there is still time to go to a casino this year). 2nd part, how is this documented?
Click to expand...
  • You have to pay taxes on your balances as of January 1st, no matter what. The site(s) will send you a 1099 that reflects your earnings (winnings minus deposits) if the amount is over $600. If it's less than $600, you're on your own.
  • If you have losses on other sites, you can subtract those losses from your winnings to lessen your overall tax burden due to DFS profits. You do, however, need to supply paperwork (i.e., PayPal, bank, credit card deposit receipts) to substantiate those claims...if you don't, you're dramatically increasing your likelihood of an audit.
  • Since DFS income is not considered 'gambling,' you cannot lump those losses into your DFS taxes...they're completely different animals in the eyes of the IRS.
**NOTE: I am not a CPA, nor a tax-advisor. The information I've shared is based on multiple years of success in DFS and having asked similar questions to my CPA; what I have explained above is what I have been told by people I trust. You should definitely defer to your own CPA to ensure that you are doing your own taxes correctly and not putting yourself in the crosshairs of the IRS.**
Click to expand...
Do you report those losses as deductions? Or do you subtract them in some other way?

 
Anyone else having issues with the withdrawal button on FanDuel?

I'm getting an error. I wanted to pull some cash out given I'll be getting a 1099.

Edit: never mind, seems to be working now.

 
Last edited by a moderator:
I don't know if anyone other than me is playing at StarsDraft, but they have confirmed that they will be issuing 1099s.

Yahoo still hasn't responded to my last question, submitted a day and a half ago.

 
I still haven't gotten a 1099 from FanDuel. Anyone else get theirs yet?

I guess that is a good thing... :unsure:

 
Joe T said:
I still haven't gotten a 1099 from FanDuel. Anyone else get theirs yet?

I guess that is a good thing... :unsure:
Click to expand...
They are delayed from both FanDuel and DraftKings (they filed for an extension). Expect them by end of February, and if you are expecting one I would not file until you receive it.

I think it's ridiculous these sites can't get them out on time, especially since they know they have to and have already done so in years past.

 
Last edited by a moderator:
Joe T said:
I still haven't gotten a 1099 from FanDuel. Anyone else get theirs yet?

I guess that is a good thing... :unsure:
Click to expand...
not a good thing. they'll still report your income to the IRS, they're just making it more difficult for you to accurately file. great site imo.

 
Did you guys get a 1099 email?

Just want to check before I go out and download this.  :unsure:

 
Joe T said:
Did you guys get a 1099 email?

Just want to check before I go out and download this.  :unsure:
Click to expand...
Yes.  Pisses me off because I already filed, now I'll have to file an amendment.  Wasn't there a Feb 1st deadline for 1099s?

 
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