1099K from PayPal-Due to Prizepicks

Forum|Forum|1 year ago
January 28, 2025
1 reply
5 views

I'm sure A LOT of people will have this issue this year with a 1099K from PayPal due to prize pick earnings. My question is how can we go about doing this?

Here's my situation:

My 1099K from PayPal is $12,000. I did not receive a 1099 misc from prize picks there for proving my loses outweighed my wins and EVERY "income" transaction on my PayPal account is strictly from prize picks.

Is my best option here to audit this 1099K and wait to show proof to the IRS and risk fees and interest if I don't win my claim? I will most likely have to send them every transaction on my prize pick account for 2024 but it just doesn't make sense because my proof is literally that I did not receive a 1099 from prize picks which is 100% proof that I did not make any income from sports gambling. And everything related to my PayPal is from them.

PatriciaV

Level 15

If you believe that the information on the Form 1099-K you received is incorrect and needs to be revised, you have the option to delay filing your tax return until this issue is resolved. Filing a request for extension of time to file will provide an additional six months to file your return. However, interest and penalties continue to accrue during this time if any additional tax due is not paid by the original filing deadline.

While Form W2-G may report NET gambling winnings if the amount exceeds the reporting threshold, Form 1099-K reports only the third-party transactions. This difference requires you to report your losses based on your personal gambling records.

Enter the information from Form 1099-K in TurboTax under the Gambling topic. (Go to Tax Tools >> Tools >> Topic Search to easily find this section.) Using this topic allows you to report your losses at the same time.

According to IRS Topic No. 419, Gambling income and losses, you are required to report all gambling winnings on Form 1040 Schedule 1. This includes winnings reported on Form W-2G, 1099-MISC, and 1099-K.

Further, you may deduct gambling losses only if you itemize your deductions on Schedule A and kept a record of your winnings and losses. You can't report losses of more than the amount of gambling income you report. Claim your gambling losses up to the amount of winnings, as "Other Itemized Deductions." If you don't qualify to itemize your deductions, you aren't able to claim your gambling losses.

If you report gambling losses, maintaining accurate records of your winnings and losses is extremely important. Be sure to save copies of any transaction records to prove your log entries in case of an IRS audit.

**Say "Thanks" by clicking the thumb icon in a post. **Mark the post that answers your question by clicking on "Mark as Best Answer"

laneroccoAuthor

Level 2

My 1099K is correct because it’s all the “income” or money I withdrew from PrizePicks. But it doesn’t cancel any of the negatives so I’m basically using money that was already taxed to gamble with. Lost more than I won. Withdrew money that I did win at times and now that’s being taxed on PayPal but if I just sent my money straight to my bank account none of this would be happening because I wouldn’t have received anything from PrizePicks because I LOST more then I WON.

PatriciaV

Level 15

Report the income from Form 1099-K under Gambling Winnings. Then enter the same amount on the following page for Gambling Losses. This is how the IRS expects you to report these transactions.

**Say "Thanks" by clicking the thumb icon in a post. **Mark the post that answers your question by clicking on "Mark as Best Answer"