@jamesneedsanswers wrote:
The IRS needs to expand their gambling tax laws and not make this so difficult each year. The online casinos should be reporting your winnings in a W2G at the end of the year since they can now track everything right in their systems.
If the sportsbook is compliant with the law, they must issue a W-2G for wagers that pay more than $600. But some may be offshore and don't follow the law even though they should. And even if they did, that doesn't help if your wagers usually pay off less than that.
The law is you report your gambling winnings. The increased 1099-K requirement was instituted by Congress so the IRS gets alerted to large transaction volumes that might represent taxable income. The problem with creating a different method for dealing with 1099-K forms is that for different people they represent non-taxable gifts, taxable self-employment income, taxable gambling income, non-taxable sales of personal items below their original cost, and who knows how many other kinds of transactions. I don't think there is a one-size solution.
Alternatively, you report your income (whatever it is) in the usual way, leave the 1099-K off your return entirely, and attach a PDF copy of the 1099 along with a written explanation when you file. Turbotax does not allow attachments so you would have to file by mail, but I believe other software programs allow PDF attachments.
