As online gambling and sports betting continue to grow in the United States, players encounter different issues and scenarios as they sign up with online operators.
One of the largest iGaming brands in the US is DraftKings, known for their excellent daily fantasy sports (DFS) contests and generous free bet offers. Your gambling winning pot will soon build up if you take advantage of these offers. Additionally, players can enjoy betting on various sports on the DraftKings sportsbook and enjoy slots on DraftKings online casino. But one of the questions surrounding playing at DraftKings is what happens to your fantasy sports, sportsbooks, and casino winnings tax-wise?
You may have heard of a form w 2 or a form w 2g, but how to these work when it comes to gambling income? We look at the details of DraftKings sports betting winnings in terms of gambling activity tax.
Anybody new to gambling may be wondering what the situation is regarding your tax return on betting income; what are the DraftKings tax rules, and are there daily fantasy taxes? This article covers how you get your DraftKings sportsbook tax form in addition to how you fill in your DraftKings tax form.
We should mention that most bettors should have received their DraftKings 1099 forms in the mail after February 1st. However, if you haven’t received yours, don’t worry. There is another way you can get hold of it- online at the DraftKings Document Center. Go to draftKings.com, my account, and find your 1099 misc form today.
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Where Do You Find DraftKings Tax Form?
There is no need to search for DraftKings tax form Reddit or search for tax forms online to find your DK tax form. The first thing you need to do is head to DraftKings.com and log in to your account. When you have logged in, click on your name in the top right and go to “My Account” from the drop-down options.
When the page loads, you will notice several account-related items. Click on “Document Center,” which you will notice on the left-hand side of the page.
When you are in the Document Center section, you should be able to see a 1099 form. This is a PDF file under Tax Items.” If you can’t see anything in this section, this is likely because you did not reach the $600 winnings threshold during the calendar year. More on that and taxes on DraftKings winnings later.
From there, you can use the details on the 1099 form to complete your taxes or alternatively print the form for your own report or tax return submission.
Does DraftKings Issue A 1099?
If you feel like you can make some big bucks from the NFL season, you may decide to place some big bets in the hope of turning a profit. If you strike lucky and you take home a net profit of $600 or more for the year playing in sportsbooks such as DraftKings, the operators have a legal duty to send both yourself and the IRS a Form 1099-MISC. If you select to receive your winnings via e-wallets such as PayPal, the reporting form may be a 1099-K.
Do you get Taxed on DraftKings?
This is a common question we see from players new to gambling. They wonder about tax returns and how much they need to declare from winnings from a regular tax year. People also look for a gambling tax calculator to work out how much money they owe.
According to the law, fantasy sports winnings of any size are considered taxable income. So, if you enter a daily fantasy sports contest on DraftKings and post a net profit of more than $600 for the year, as we have mentioned above, DK must issue a 1099-MISC tax form to both you and the IRS.
Additionally, many people may be wondering if gambling losses can be written off. The answer is, yes, gambling losses are tax-deductible, but only to the extent of your winnings. This means you must report all of the money you have won as taxable income on your return. However, the deduction on your losses is only an option if you itemize your deductions.
This is different from a state tax, they are known as itemized deductions borne from using a gambling establishment. Any taxable income generated from sports betting winnings must be declared.
How do you fill out a DraftKings Tax Form?
When you have successfully got hold of your form, filling it in is straightforward. You will be required to provide your business name or full name, tax classification (i.e., individual/sole proprietor, C Corp, S Corp, etc.), social security number, and address. Most of the time, you will list yourself as an individual.
If you are apprehensive about submitting your social security number to a daily fantasy sports site, there is no need to worry. Daily fantasy sports sites are registered US companies, so they shouldn’t be considered different from any other business that might request you fill out a W9 or send you a 1099 form.
What should you do if your 1099 form is not available?
If you have not received your DraftKings form in the mail and there isn’t a tax form available in the Document Center, what is your next play? Well, don’t close your DraftKings account and hope the form suddenly appears in the mail. It may be that you have not hit the $600 threshold in profits last year to prompt the 1099 form to be sent to you.
If you think you have reached the $600 in net profits during the year at DraftKings and you haven’t got your form, we would recommend you contact customer service at firstname.lastname@example.org state that you haven’t got a form.
Please note that even if you showed a small profit for the previous year (under $600) on DraftKings, you must still record your income on your 1040 federal income tax return. If you have already sent your income tax return and didn’t claim DFS income, you may need to file an amended return.
Are winnings reported to the IRS?
Yes, they do. However, there are specific thresholds that players must pass before a casino will be required to report winnings. This threshold differs and is dependent on the kind of game you play.
For bingo and slot machines, casinos and casino apps will be required to report winnings that are more than $1,200. If it is a horse race track, winnings that are more than 300 times your bet or $600 need to be reported by the casino. However, if it is a poker tournament, the threshold is $5,000.
How do I keep track of my winnings on DraftKings?
If you head to the ‘My Contests’ page and click the ‘History,’ you will see a link where you can download your betting history. Once you have clicked that link, you will have access to an Excel spreadsheet with all of your past leagues, filtered by entry fees, data, place, points, and winnings.
How are professional gamblers taxed?
If a person engages in gambling as a profession, then earnings from gambling are categorized as typical income. Therefore, they are taxed at the standard income tax rate for taxpayers. As a person who is self-employed, the expenses and income must be recorded on Schedule C.
How are Gambling Winnings Taxed?
If you win a significant amount of cash in a game that is legal and based on chance, the payer of your earnings will take out 24% of the earnings for taxes. Then, they will offer you an IRS Form W-G2, which you’ll use in recording the transaction.
This amount of cash differs when it comes to gambling. If you play bingo games or slot machines, the figure is $1,200, but for Keno it is $1,500. Players who earn more than $5,000 on wagering pools, sweepstakes, and lotteries will be taxed.
Are Losses from Gambling Deductible?
You can deduct any cash lost during gambling from your earnings for the purpose of taxes. But if your gambling losses are more than what you earn, you can’t claim it as a tax write-off.
Do you get taxed on DraftKings?
Any fantasy winnings are considered as taxable income. Consequently, if you generate a profit of over $600 for the year, the operator must issue you with a 1099-MISC form, which will also go to the IRS. Gambling losses are tax-deductible, but only to the extend of your profits.