Sports betting

[hus1125]

Hello,

New to DraftKings. I am single. Made around 650K this year. I usually have someone else do my taxes so am not sure how this works. I know the standard deduction is usually around 13,000. I bought a 400k house and sold one as well. The total win/loss was -$19,000. Can anyone explain what I should be doing? Will I receive a form from DraftKings i need to upload? Will this help me not owe as much as I would have since I lost this amount? If anyone could explain in the simplest terms.

[VolvoGirl]

For that much income you should go to a CPA or EA or tax accountant.

[Mike9241]

yes it does issue 1099 - see this link

https://gamble-usa.com/guides/draftkings-tax-form-1099/ 

winnings get reported as income on schedule 1.

losing bets can not be deducted against winnings. they are only deductible if you itemize and are limited to gambling winnings

if the house sold was your personal residence and sold at a gain or you got a 1099-S it needs to be reported on form 8949. Turbotax will take you through the questions needed to report the sale and determine if you qualify for the home sale exclusion.  Any loss on the sale is not deductible.

for the new house, on schedule A you can deduct mortgage interest and real estate taxes you paid in 2021 (net of any closing credit received)

the deduction for all taxes on Schedule A is limited to $10,000

not sure of the source of the 650K.  when doing 2021 you may want to refer to the 2020 return to see where amounts appear.  if you think you're going to need help you may want to use Turbotax live.

[hus1125]

Thanks for your reply. I guess my biggest question is since I lost that big of an amount (19K) wouldn't I want to itemize since it would be equal more than the 10K limit on Schedule A? Source of the 650K is just from my job (gross income). All I have I believe that would affect the return is: selling my first home for a 40K profit. Buying a 400k house (putting 20% down.) Gross of 650K from job. Lastly the loss of 19K from draftkings. I definitely plan on using someone but just wanted insight of how/what to do.

[xmasbaby0]

Gambling

To enter the W-2G  or other documents For your Gambling winnings--Go to Federal>Wages & Income>Less Common Income>Gambling Winnings

You can enter your winnings, and then keep clicking through the interview to enter gambling losses.

https://www.irs.gov/help/ita/how-do-i-claim-my-gambling-winnings-and-or-losses

Gambling winnings are taxable income.  Losses are an itemized deduction.  If you do not have enough itemized deductions to exceed your standard deduction, your losses will have no effect.

https://blog.turbotax.intuit.com/income-and-investments/how-are-gambling-winnings-taxed-8891/

https://ttlc.intuit.com/questions/1900352-can-i-deduct-my-gambling-losses

2021 STANDARD DEDUCTION AMOUNTS

SINGLE $12,550  (65 or older + $1700)

MARRIED FILING SEPARATELY $12,550  (65 or older + $1350)

MARRIED FILING JOINTLY $25,100  (65 or older + $1350 per spouse)

HEAD OF HOUSEHOLD  $18,800  (65 or older +$1700)

Legally Blind + $1350

[VolvoGirl]

Oh, I thought you won 650k!  Or thought it was a typo, lol.

[hus1125]

Lol no I wish! That is just my gross income. With what I mentioned above with only those things affecting it do you think a Turbo Live would be able to help me move forward when I file? Also, again, wouldn't I do itemized regardless just stating I have 19K in gambling losses and it is more than the SINGLE $12,550? Then I would also be able to itemize mortgage or whatnot? Do i make too much for turbo to help with my situation?

[hus1125]

Also it would help with this info:

Sportsbook Handle: $115,414.42
Sportsbook Payouts: $96,315.05

Total Win/Loss: -$19,099.37

[Vanessa A]

No, you do not make too much for TurboTax to handle your situation.  TurboTax Live would be able to help you if you get stuck entering all of your information.  

Yes, you would want to itemize instead of taking the standard deduction since your gambling losses are greater than the standard deduction for a single individual.  

Yes, you can deduct your gambling losses on Schedule A up to the amount of your winnings and then itemize your mortgage interest and whatnot.  With the amount of your losses, be sure to retain the records of your losses.