mine always comes state first then fed but im in california so might be different for u

Stuck in the same boat rn. This PATH act stuff is so annoying fr

This entire thread perfectly captures why I've become a reluctant expert in tax law despite just wanting to play some online poker and slots occasionally. What strikes me most is how the IRS has created a system that's almost designed to be incomprehensible to regular people. I went through something similar last year - ended up with a net profit of about $1,200 but had to report over $28,000 in "gambling winnings" and then itemize $26,800 in losses. Lost my standard deduction and ended up owing more in taxes than if I had just lost the money outright. The absurdity is mind-blowing. What really bothers me is that there's no educational resources from the IRS about this. They'll audit you for getting it wrong, but they won't explain how to get it right. I had to piece together information from forums like this, conflicting advice from different tax preparers, and hours of research just to file my return. The bonus situation you described is particularly insane. You're essentially being taxed on turnover, not profit. It's like being required to pay income tax on your gross salary before any deductions, but then being allowed to "deduct" the money you spent on rent and food - except you lose your standard deduction for the privilege. At this point I think the only winning move is what several people mentioned - just avoid online gambling entirely until Congress fixes this mess. The entertainment value isn't worth becoming an unpaid IRS compliance specialist.

This thread is incredibly validating - I thought I was losing my mind trying to figure out this system. I'm a newcomer to online gambling and had no idea what I was getting into tax-wise. I started with sports betting last fall, nothing crazy, maybe $50-100 bets here and there. Had some good streaks, some bad ones, ended up ahead about $400 for the year. Seemed simple enough until I started looking at my tax obligations. Turns out I have over 3,000 individual transactions to sort through because apparently every single winning bet counts as taxable income, even if I lost the next five bets. I won a $200 bet on Monday, lost $250 on Tuesday through Friday, but I still have to report that $200 win as income. It's completely divorced from financial reality. What really gets me is that I'm a teacher - I don't exactly have spare time to become a tax expert or money to hire a CPA. I spent my entire winter break trying to make sense of spreadsheets instead of relaxing. And for what? To properly report $400 in winnings that will probably cost me more in tax prep time than I actually won. Reading about people avoiding online gambling entirely because of the paperwork is making me seriously reconsider whether this hobby is worth it. I just wanted to add some excitement to watching games, not become an unpaid IRS data entry clerk. Thanks to everyone who shared their experiences - at least now I know I'm not alone in this administrative nightmare.

Quick question for the group - does anyone use any specific tax software that handles day trading well? I tried using TurboTax last year and it was a nightmare with all my trades!

This is such a common confusion for new traders! I went through the exact same thing when I started trading full-time. The key thing to understand is that your LLC structure doesn't change the fundamental tax treatment of trading profits - they're still considered capital gains, not business income subject to self-employment tax. However, I'd strongly recommend getting professional help to navigate this properly. As others mentioned, while your trading profits won't be subject to SE tax, you need to be careful about separating any other business activities (like if you start offering trading courses or signals). Also, make sure you're tracking all your trading-related expenses properly - home office, equipment, data feeds, etc. can all be deductible. One thing to keep in mind for next year: if you do qualify for TTS, you'll want to make that election by the filing deadline. It won't change the SE tax situation, but it will give you better expense deductions and allow you to deduct trading losses above the $3k capital loss limit. Definitely start making quarterly estimated payments based on your expected annual profits - the IRS doesn't care that you're not paying SE tax, they still want their income tax!

Robinhood is the WORST with tax documents! I've used them for 3 years now and they always wait until the last possible moment. Last year they actually sent a corrected 1099 in MARCH after I had already filed! Anyone know if you can request them earlier somehow? Like is there a customer service number that actually works?

This is exactly why I always recommend keeping detailed records of your own trades throughout the year! While you're waiting for Robinhood, you can use your own transaction history to get a pretty accurate estimate of your capital gains/losses. If you log into your Robinhood account, you can export your transaction history and calculate your gains/losses manually. It's tedious but doable. Just be extra careful about wash sale rules - those can be tricky to calculate on your own and might differ from what Robinhood reports. Also, for future reference, consider switching to a broker that actually cares about getting tax docs out early. I moved from Robinhood to Schwab last year and got my 1099 on January 25th this year. Life's too short to deal with Robinhood's terrible customer service and delayed tax reporting!

called them yesterday and the lady said there experiencing delays due to high volume rn. might take up to 14 business days smh

Been waiting on my Kansas refund for 12 days now and starting to get worried. Filed electronically on Jan 28th, got accepted same day, but still nothing in my account. Called their hotline twice and just got the generic "processing takes 7-14 business days" message. Really hoping it shows up soon since I need it for some bills. Anyone else experiencing longer delays this year?