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.
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