I received a 1099k from gambling winnings, when in reality my losses were greater than my winnings. Do I need to report my 1099k?

[lauren317]

After following the steps listed for the 1099K reporting and then reversal,  would you also report the winnings/losses if they even out in the "gambling winnings" section?

[ThomasM125]

Yes, you do need to report your gambling winnings even if your losses equal or exceed them. That is because your losses are only deductible if you itemize your deductions. So, if your losses and other itemized deductions are not greater than your standard deduction, you will have to pay tax on your winnings but your losses will not benefit you on your federal return as a tax deduction. @lauren317

[Af2747]

Ok back again.. I entered all my w2g’s forms and other casinos winnings not reported on w2g’s. I claimed my losses. I’m getting stuck on when I enter the 1099 k from PayPal and how to back that out?? The 1099k is my winnings already reported from the w2g’s and other gambling winnings. As soon as I enter the 1099k I’m owing $$$$.. I can’t seem to get to that “box” that was shown on last answer to report as “duplicate” income ??

[PattiF]

If you have already entered the information that is on the W2Gs, then it is not required that you also enter the 1099-K. You reported the gambling winnings when you entered the W2Gs and you don't need to enter it twice. You don't need to enter that information as you already have reported the winnings in your return. The IRS is checking for the income that you received and will see that it was reported in your return as gambling winnings. You can delete the 1099-K.

@Af2747 

[Af2747]

Ok .. as you can see on previous responses I was told I had to enter them both that’s where I was getting hung up .. So I don’t report the 1099k at all because it is covered with my w2g’s and other gambling wins that I already have entered. 

[PattiF]

Yes, you don't need to report the 1099-K because it duplicates the amounts on the W2Gs.

[skisbosco]

We are getting conflicting advice here.   Others have indicated that you need to insert the 1099K because the IRS will receive this and be looking for it - the correction would then be to cancel out the value in the 1099K by reporting another negative entry and then additionally reporting gambling winnings.   This seems to make sense if in fact the IRS will be seeing the 1099K information and be expecting it.  We are now hearing that we can simply ignore the 1099K if we cover these values in the gambling winning section - the concern with this response is that the IRS will have no clue that 1099K values are in fact the same as gambling winnings.

Can you provide insight into if the IRS actually receives the 1099K? The need to include it in our return seems wholly dependent on if the IRS will be aware of it and looking for it. 

[JulieS]

Yes, the IRS definitely receives the 1099-K. 

The reason the advice you see seems to be conflicting is that the 1099-K has been around for several years, but the IRS has announced new guidelines on the threshold for issuing a 1099-K, and new enforcement initiatives. These new rules were set to take effect in 2022.

Late in 2022, the IRS announced a delay in enforcing the new rules to allow people to learn more about what they are required to do. Click here for the most recent IRS guidance. 

Originally, as long as you reported the income from your 1099-K in the appropriate place on your return, you did not have to also report your 1099-K. 

As of 2022, the advice is to report your 1099-K as outlines in JamesG1's post and make any adjusting entries that apply to your situation.