Where do I put information on a1099-K that I received from PayPal for online gambling site withdrawals. I don't itemize. Need to also list DEPOSITS I made, no?..:

[hugz1]

I don't know where to show this in Turbo Tax where I can offset the losses since I don't itemize.  I am afraid to NOT acknowledge this form since I know it went to the IRS as well.  I shouldn't have to owe when all in all, I was at a loss, and not a gain for the year.  Please help.  Thank you!

[HelenC12]

Yes, you need to report gambling winnings from form 1099-K.  You may only deduct gambling losses, to the extent of gambling winnings. The gambling losses will be on Schedule A, if you itemize your deductions, as opposed to taking the standard deduction. 

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

To report your gambling winnings on your tax return, complete the following steps in TurboTax:

1. Open your return.
2. Search for Other Income with the magnifying glass tool on the top of the page.
3. Select the Jump to Other Income link in the search results.
4. Select No to the question Did you get a 1099-MISC?
5. Scroll down to Gambling Winnings under Less Common Income.
6. Click Start next to Gambling Winnings. 
7. Choose Yes to the question Did you win money or prizes from gambling or lotteries during 2020?
8. Choose I did not receive a W-2G.
9. Follow the on-screen instructions to enter your data. 
10. After you enter your gambling or lottery winnings that weren't reported on W-2G, you can enter your Gambling Losses on the next screen. 

Source: LenaH

[hugz1]

Thank you a ton for your help!  My only last question is, that when I enter the amount on the 1099-K, it shows the amounts that I also received on a W2-K for my bigger wins, totaling around 5 grand.  Since I don't want that amount reported twice, would I DEDUCT it from the total dollar amount on the 1099-K I received from PayPal and show a different number than what has been submitted to the IRS on that form?  Since it says "other winnings", I could do that right?  Or no?  Thank you again SO MUCH!

[RaifH]

Yes, you would deduct the amounts shown on your W-2Gs from the total on your 1099-K. To do this:

1. Follow steps 1-7 @HelenC12 outlined above.
2. Answer Yes to receiving a W-2G and enter all your W-2Gs. Click Done.
3. Answer Yes to Do you have other winnings not on a W-2G?
4. Enter the winnings on the 1099-K that you have not already reported on your W-2Gs. 
5. Let us know if you had any gambling losses in 2021 enter your losses up to your winnings. TurboTax will tell you the winnings, which should match the total amount on your 1099-K. 

[Rookie-2727]

This does not work.  After you enter the gambling winnings and losses you still have to pay taxes on the 1099-k reporting.  So even if you deposit money to your casino account then withdraw the same amount there is no way to offset the initial deposit to claim a 0 income?

[DianeW777]

It depends.  If you know that you put money into your gambling account and withdrew the same amount without doing any gambling, then none of it is taxable. You would simply keep your documentation with your return and do not report it as income.

If you did any gambling then you have income and the gambling expense, if any, would be allowed only if you itemize deductions.  If you do not have enough to itemize deductions then all gambling winnings are taxable.

The law is not intended to track personal transactions such as sharing the cost of a car ride or meal, birthday or holiday gifts, or paying a family member or another for a household bill.

• Understanding third party payments from cash platforms (click the link and other links on the page for the most up to date information)

It will be very important to keep a list of payments received to document proof of non-income payments. The IRS requires reporting for anyone who receives payments that exceed $600 for 2023.

@Rookie-2727

[Rookie-2727]

Hi DianeW777,

Yes, I am trying to figure out how to itemize the gambling in this case which would be a loss and still show the 1099-k info.  The problem I run into is no matter what I put in for gambling losses and gains I can't tie the two together.  For example.  1099k shows +1000.  

If I add +1000 for gambling winnings referring to the 1099k then put in the 1000 in gambling loss say if you started with 2k and withdrew 1000.  

If you can explain how to do this in turbo tax without getting taxed twice it would be greatly appreciated.

[DianeW777]

Yes.  It appears you are entering the correct information, however you may not see a reduction in your income for the losses which could be correct.  Less Common Income > Prizes, Awards and Gambling Winnings

1. You must enter your full amount of gambling winnings. You will be asked about the total amount of losses, enter that as well. 
2. f you do not itemize your deductions, in other words you use the standard deduction, the losses are not deductible at all. 
3. If you do itemize deductions, regardless of the amount of your losses, you will be limited to the amount of the winnings.  

@Rookie-2727

[Rookie-2727]

Yes, its itemized, unfortunately it does not have a radio button in the 1099-k section to apply the funds received as gambling.  In turbo tax you have to use the other radio button.  Then it taxes you for any amount you have on the 1099-k.  So when you go to gambling section and enter 1000 made in gambling and reported on 1099-k.  And 1000 loss which is basically what I have because I started with 2000.  I am still on the hook for the funds received from the 1099-K.  Turbo tax doesn't have the logic to apply the funds received from 1099-k as gambling.  So do you know how to enter this in turbo tax so this doesn't happen?  To me it appears turbo tax was not ready for this scenario and there is no easy way to do it and they are going to see a lot of support cases for this.

[DawnC]

If you have all of your gambling winnings reported in the gambling section, you have 2 choices with the 1099-K - either enter it in TurboTax with an offsetting entry or do not report it at all.    The result is the same.

• If you don't enter it on your tax return, you would need to keep clear records of your gambling transactions (you should do that anyway) in the event you receive an inquiry.   Make sure you can show where all of your actual gambling winnings were reported on this tax return.   As long as you are reporting ALL of your income on your tax return, and you have records to show that, you should not have an issue with the IRS.

• The other option is to report the 1099-K as Other Income and then enter another offsetting entry in the Other Reportable Income section (with the same amount, but with a negative sign in front of the amount) with a description of 'all gambling winnings reported on Line 8b of Schedule 1'.    This will negate the income from the 1099-K, so it is not taxable on your return.

In either case, make sure to keep detailed records of your gambling winnings and losses so you can show that you have included all of your income on your tax return.   See the images below to see where to enter the offsetting negative entry.  @Rookie-2727

[Rookie-2727]

Perfect! I'll give it a shot. 

Thanks so much!

[a_harm86]

Did it work?

[BrittanyS]

You can follow these steps provide above by LenaH to enter gambling wins on a 1099-K and offset the losses through making an entry in Less Common Income for the gambling losses:

To report your gambling winnings on your tax return, complete the following steps in TurboTax:

1. Open your return.
2. Search for Other Income with the magnifying glass tool on the top of the page.
3. Select the Jump to Other Income link in the search results.
4. Select No to the question Did you get a 1099-MISC?
5. Scroll down to Gambling Winnings under Less Common Income.
6. Click Start next to Gambling Winnings. 
7. Choose Yes to the question Did you win money or prizes from gambling or lotteries during 2020?
8. Choose I did not receive a W-2G.
9. Follow the on-screen instructions to enter your data. 
10. After you enter your gambling or lottery winnings that weren't reported on W-2G, you can enter your Gambling Losses on the next screen.

@a_harm86