PayPal 1099-K for online lottery gambling and I have losses

[GeoErick]

I received PayPal 1099-K for withdrawing money from online lottery gambling (VA Lottery), and I already have a record that I lost money more than what was reported on 1099-K.

PayPal 1099-K reported $1,149 total in "income" but my losses were $1,400. Where do I report that to offset that? I have a record of deposits.

No, I did not get W-2G because all of my lottery winnings were between $0.20 to $75. 

[LindaS5247]

In general, you would enter your gambling income under Less Common Income, Prizes, Awards, and Gambling Winnings. 

However, you received a Form 1099-K so you should enter this Form 1099-K as follows (because this form will be reported to the IRS from PayPal):

Follow these steps to enter your 1099-K:

1. Sign in to TurboTax and open your return.
2. Select Search and enter 1099-k.
3. Select Jump to 1099-k.
4. Select Yes on the Did you get a 1099-K? screen.
5. Answer the questions and continue through the screens.
6. Choose "Other" for what type of income it is.
7. Follow all the prompts and answer all follow-up questions.

If you are able to itemize your deductions, your gambling losses will be reported on Schedule A to offset your winnings.  If you are not able to itemize then you can not deduct your gambling losses.  You would only itemize if your deductions are high enough to exceed the standard deduction for 2022.

For single taxpayers and married individuals filing separately, the standard deduction is $12,950 in 2021. 

For married couples filing jointly is $25,900, and  

For heads of households, the standard deduction is $19,400. 

  

If you're at least 65 years old or blind, you can claim an additional 2022 standard deduction of $1,400 ($1,750 if using the single or head of household filing status).  

If you're both 65 and blind, the additional deduction amount is doubled. 

For more information, please see Can You Claim Gambling Losses on Your Taxes?

For more information on deductions, please see How does the Standard Deduction differ from itemizing deductions?

Note: Form 1099-K is used by the IRS to track payments that you received from credit cards, debit cards, or electronic payment services (Square, PayPal, ePay, etc.). For 2022 the IRS does not require you to report these payments separately. TurboTax will not give you a separate field for the amounts reported on your 1099-K(s), which is why you need to report this income under the appropriate income topic.