Whatever you do, make sure you put the amounts from you 1099-K onto your return. It appears the best way to do this is in the other income section. I got hit from my 2020 return. I had deposited 22,000 into online sportsbooks and withdrew 23,000. Again, all the same money, deposit 500, withdraw 500 etc multiple times throughout the year. However, I got a 1099-K but saw that I had income of 23,000. I knew this was not right and had no idea what to do. That was not good. I am currently in an appeals state with US Tax court. They claim I owe 8,000 plus interest and penalties when I only made 1000. Hopefully they rule in my favor. I then amended my 2021 return to reflect what I played that year. And this year I am filing my 1099-K under the miscellaneous showing what I withdrew and then using the negative symbol for what I deposited. They have ruined recreational gambling. I will no longer be using online gaming sites or Paypal. I dont know why Paypal cant differentiate when they see a deposit to "Barstool" and then a withdraw from "Barstool." seems like they should be able to determine its the same entity. The funny thing is though, if you do receive a 1099-Misc from an online casino what do you do? Because you have to report that 1099-Misc but you also have to show that same money on your 1099-K. Its very frustrating and causing a lot of people anxiety because the numbers can add up quick if you are depositing and withdrawing daily basically the same $500 over and over. Someone please tell me that they have gone through the appeals process and had a positive outcome?!?!?
