I use PayPal to deposit/withdraw funds to my online sportsbook account. I received a 1099-k but the “income” is related to withdrawals I made from my online sportsbook.

[Mo1234]

I reported my gambling wins and losses already, so I’m worried about being taxed twice. The 1099-k shows income of $116,987.68.

The W-2G only shows $12,090. But the activity statement I downloaded from the sportsbook shows the below…

Amount Deposited: $166,397.79

Amount Played: $871,428.11

Amount Won: $821,315.04

Amount Withdrawn: $116,287.68

[Mo1234]

Just to be clear on my ask… how do I show the IRS that the “income” on my 1099-k, is related to my gambling withdrawals? If I’m reporting my gambling wins and losses (net loss for the year)… how do I show that on my tax return so I’m not paying taxes on the “income” from the 1099-k?

As you can see above, the 1099-k is nearly identical to the amount withdrawn from my sportsbook. I’m just concerned how I can offset this since the W-2G amount is much smaller than the 1099.

[BrittanyS]

You must report the information on your 1099-K.  The IRS receives a copy of your 1099-K and will take action if you do not report the 1099-K on your tax return.

You may report any items on your 1099-K unrelated to business activities, such as payments to friends and family, coffee & donuts from the local store, payments to local stores, etc., as other income. 

 You will need to make two entries for your non-business items; one as a positive amount to show the personal items reported on the 1099-K, the second as a negative value.  This reports the personal 1099-K items and removes them from being taxable income. 

To enter your personal 1099-K items, sign in to your TurboTax account if it is not open and follow these steps:

1. Select Income & Expenses.
2. Scroll down to Less common income and select show more.
3. Scroll to  Miscellaneous Income, 1099-A, 1099-C, and check start.
4. On the page Let's Work on Any Miscellaneous Income, scroll to " Other reportable income " and click start.
5. On the page Any Other Taxable Income, select yes.
6. On the page Other Taxable Income, enter a description indicating Personal 1099-K and amount.
7. Select continue.
8. Select done on the next page

Repeat the above steps this time; in step 6, add the amount as a negative value.

This will report your personal 1099-K items and remove them as taxable income.  Any remaining amount will be reported as business income.