Gambling Winnings, Terrified

[sedtax]

Hello, I did not report my gambling winnings for 2021 because I was told I did not have to if I had a net loss. Now I am scared I got bad advice. On FanDuel I won $13,051.35 and lost $13,014.95 (+$36.40). On DraftKings I won $1,542.06 but lost $1,830 (-$288.60). I did not receive a W-2G or 1099 from either site. I did not receive one from PayPal either. I struggle with OCD and convinced myself I am going to jail. Is this true? Or will I receive a CP2000? I am so scared. I really thought I was doing the right thing.

[Critter-3 · Accepted solution]

If you filed an incorrect return simply file an amendment and report all your winnings even if you did not get a form for it.   If you itemize deductions you can also claim the losses.  

How to amend (change or correct) a return you already filed

https://ttlc.intuit.com/community/amending/help/how-to-amend-change-or-correct-a-return-you-already-...

[Anonymous_]

Follow @Critter-3's advice.

See https://www.irs.gov/taxtopics/tc419

The chances of you being prosecuted and "going to jail" over something like this are slim to none (and almost certainly none).

[Mike9241]

Does FanDuel report my winnings to the IRS?

So a common FanDuel taxes question is whether or not the site itself reports winnings to the IRS. This does happen, but in limited circumstances.

If you win any bet with super longshot odds, where winnings are 300x more than the wager, and you win $600 or more, your winnings are reported to your home state’s tax office and to the IRS.

Then if you win $1,200 or more from a slot game, your winnings are also reported to the same people.

DraftKings

https://help.draftkings.com/hc/en-us/articles/4406697330067-What-are-the-W-2G-reporting-and-withhold...  

so if it sent nothing to the IRS you'll get no tax bill because the  IRS/state don't know of your winnings.  however, once your original return is processed you are supposed to amend it to report the gambling winnings. gambling losses are only deductible if you itemize. if you have a state income tax that too will likely need amending but the federal change should automatically carry through to the state if needed.  As for jail that's unlikely for a single-year failure to report. the IRS prefers the tax $s. prosecuting and jailing you would likely cost more than the taxes the IRS could collect.   multi-year, can't say, because from time to time the IRS likes to make an example of a tax cheat. also, tax cheats are caught when someone reports them to the IRS 

[sedtax]

Hello @Mike9241 @Anonymous_ @Critter-3 ,

I amended my federal return today to include my winnings and it was accepted. It did not impact my amount owed at all but my peace of mind is greatly improved. Thank you for all of your sage guidance!