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Level 1
posted Feb 13, 2022 9:30:20 AM

1099-K from Paypal for payment from small time sports wagers

My son received a 1099-K from Paypal for small time winnings from sport wager sites, such as Draftkings, etc.  This is done as hobby and not a business.  The total is under $2500 from 30 transactions.  However, they don't include the amounts he put in to make the sport wagers.  In other words, he did not make even close to $2500.  How would he report this in TurboTax in order to show the IRS he didn't earn that much in income?

I got to the Here's what to do with your Form 1099-K and it says TT doesn't need to create a separate entry for the 1099-K.  That's because it would already be included in other income, such as self-employment or rental income.  The amount indicated is from neither of those.

Any help would be appreciated.  Thank you.

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1 Replies
Expert Alumni
Feb 13, 2022 9:55:33 AM

As of 2018, you can no longer deduct hobby expenses from your federal taxes. However, some states pull in hobby expenses from your federal return to deduct them at the state level.

 

To enter Hobby Income (and expenses) as other reportable income:

  1. Sign into your TurboTax account.
  2. Select Pick up where you left off or Continue your return.
  3. Select Federal from the left side menu.
  4. Type other reportable income in the search bar and click on the Jump to other reportable income.
  5. On the Other Wages Received screen, select No at Did you receive any other wages? 
  6. If the “Jump to” feature doesn’t work, on the Wages and income screen, scroll down to Add more income. If you don’t see this, scroll down to Less Common Income and select Show more and scroll down to Miscellaneous Income, 1099-A, 1099-C then Start/Revisit.
  7. On the Let’s Work on Any Miscellaneous Income screen, scroll down to Hobby income and expenses, Start or Revisit.
  8. Continue with the onscreen interview until complete.