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November 26, 2022
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TurboTax Premier Online

DoninGA

Level 15

See this TurboTax website for information when playing fantasy sports - https://turbotax.intuit.com/tax-tips/general/tax-considerations-for-fantasy-sports-fans/L75xYecdS

Reporting income or loss from fantasy sports on Form 1040

You must report all income earned from fantasy sports either as "other income" on Schedule 1 for Form 1040, or as business income on Schedule C. If you use the first approach, your fantasy sports is considered a hobby and you can't deduct any of your expenses or losses.

Reporting income or losses from fantasy sports as business income

If you can establish that you play fantasy sports as a business, you can report your net profit as business income on Schedule C. The great advantage to this tax choice is that you can then report all losses as well. If you have a net loss for the year, you can use that loss to reduce taxable income from jobs you hold or other businesses you run.

The IRS allows you to claim fantasy sports as a business if you can convince them it is not a hobby and that:

You engage in fantasy sports regularly, and
Treat it as a business activity with the intention of earning a profit

The IRS may consider an activity to be a business if it earns a profit at least two years out of every five.

Critter-3

Level 15

With the new 1099-K rules in place this year everyone will be getting one if you have $600 or more so using PayPal for personal uses is not wise any longer. The IRS has not issued any instructions on how this is to be handled correctly. Going forward I highly recommend you seek another way to "cash out" your winnings and make your wagers.