Just to add some clarity on the session method - I had a similar situation with multiple sportsbooks last year and was initially overwhelmed by hundreds of individual transactions. What really helped was understanding that you can define a "session" however makes sense for your gambling pattern, as long as you're consistent. For online sports betting, I grouped mine by calendar day since I typically would place several bets throughout a day. Some people group by the time they log in and out of the app. The key is documenting your method and sticking to it. One important thing to note: even though you calculated a net profit of $5,400.66, you still need to report the GROSS winnings of $33,862.41 on your tax return. The $28,461.75 in losses can only offset this if you itemize deductions on Schedule A. Also, make sure you're not double-counting anything in your calculations. Sometimes deposits can get confusing if you're looking at account balance changes versus actual bet outcomes. The transaction log should clearly show "bet placed," "bet won," and "bet lost" which are the key data points for tax purposes. Keep those FanDuel records organized - if you ever get audited, having clean documentation of your session method will be crucial!

This is a really common confusion point that I see all the time! You're absolutely right to report the $5,400.66 as your net gambling income, but there's an important distinction in how the IRS wants you to report it. You'll actually need to report your TOTAL winnings of $33,862.41 as income on Form 1040 (line 8b for gambling winnings). Then, if you choose to itemize deductions on Schedule A, you can deduct your gambling losses of $28,461.75 (but only up to the amount of your winnings). Your $4,100 in deposits are NOT considered losses - they're just the money you transferred to play with, similar to exchanging cash for chips at a casino. The actual gambling losses are the $28,461.75 from bets you lost. So your tax impact depends on whether you itemize: - If you itemize: You report $33,862.41 in winnings and deduct $28,461.75 in losses, netting to taxable income of $5,400.66 - If you take the standard deduction: You report $33,862.41 in winnings with no offset, so you pay tax on the full amount Make sure to keep all your FanDuel transaction records well-organized by session as you've done - that documentation will be crucial if you're ever audited. The session method is perfectly valid and much more practical than tracking individual bets!

I just wanted to thank everyone for all the detailed advice in this thread! As someone who's been casually playing on these platforms but completely ignoring the tax implications, this has been a real wake-up call. I've been tracking my overall wins/losses in my head but clearly need to get much more organized about record keeping. The Google Sheets approach that @Leo McDonald mentioned sounds perfect - simple but comprehensive enough to handle everything I need for tax purposes. One thing I'm still unclear about though - if I had a really good month early in the year but then gave back most of those winnings in subsequent months, how does that affect my tax liability? Do I owe taxes on the gross winnings from my best month, or can I offset those with later losses within the same tax year? I'm asking because I had a hot streak in March where I won about $2,800, but then went through a rough patch and gave back about $2,100 of that by June. Want to make sure I understand what I actually owe taxes on before I start setting money aside for quarterly payments. Also planning to download all my transaction histories this weekend before I forget. Thanks again to everyone who shared their experiences - this thread is going to save a lot of people from making costly mistakes!

I'm dealing with a very similar situation and this thread has been incredibly helpful! I've been playing on Underdog and PrizePicks for about 6 months and have around $2,400 in net winnings, but like many others here, I had no clue about the tax implications until now. After reading through all the advice, I immediately went and downloaded my transaction histories from both platforms. Found them exactly where people mentioned - under Account Settings for PrizePicks and buried under Account > History for Underdog. The CSV exports are actually pretty detailed and show everything I need. One thing I noticed that might help others - both platforms also show your "net deposits" vs "net withdrawals" in their account summaries, which gives you a quick sanity check on whether you're actually up or down for the year before diving into the detailed transaction logs. I'm definitely going to start that Google Sheets tracking system going forward and set up automatic transfers to a separate tax account. Based on the 25-30% rule mentioned throughout this thread, I should be setting aside about $600-720 for taxes on my current winnings. Thanks especially to everyone who shared specific details about finding the transaction histories and explained the itemized vs standard deduction decision. This community knowledge is way more practical than anything I could find through official IRS resources!

Has anyone addressed the retirement account angle here? One major benefit of S-corp employment is that you can contribute to a Solo 401k as both employer and employee. If you're not on payroll anymore, you're missing that opportunity. When I cut back my S-corp involvement, I kept myself on a minimal salary partly to maintain my retirement contributions. Worth considering if retirement planning is important to you.

This is a really common situation post-COVID, and you're handling it correctly from what I can see. Since you're not performing any services for the S-corp anymore and your parents are properly W2'd as the actual workers, you shouldn't need to take a salary. The key documentation points others mentioned are crucial though. I'd add that you should also keep records of your new W2 employment showing you're working full-time elsewhere - this helps demonstrate you're not available to provide substantial services to your S-corp. One thing to watch out for: if you're still involved in any major business decisions (like whether to take on new clients, major expense approvals, etc.), document exactly what those activities are and how minimal they are. The IRS generally looks for a pattern of regular, ongoing services rather than occasional ownership decisions. Your situation sounds legitimate, but having clear documentation will save you headaches if you ever get questioned about it.

Has your accountant run the cash flow projections for both scenarios? When we bought our last work truck, our CPA showed us that even though buying gave us the Section 179 deduction, the monthly lease payments were lower than loan payments would have been, which helped our cash flow during our expansion phase.

One thing I haven't seen mentioned yet is the timing of when you actually need the deduction. Since you mentioned you're already showing high expenses this year from expansion, you might not need the full Section 179 benefit right now. If your business is projecting significantly better profits next year, that larger deduction could be more valuable when you're in a higher tax bracket. Also, with a $130k vehicle, make sure you understand exactly what type it is for tax purposes. The Section 179 limits vary dramatically - if it's a luxury SUV under 14,000 pounds, you're capped at around $28,900 regardless of the purchase price. But if it's a heavy-duty truck or van over 14,000 pounds, you could potentially deduct the full amount. Have you considered a hybrid approach? Some dealers offer lease-to-own programs where you can start with lower monthly payments and decide later whether to purchase based on how your business performs.

Just a heads up that HR Block and TurboTax both handle these 1099-R Code G situations pretty well. If you use either software, they'll walk you through the right questions to determine what type of transaction it was and how to report it.

I had a very similar situation last year and it turned out to be exactly what others have mentioned - an in-plan Roth conversion that I had completely forgotten about! The key thing to remember is that when you convert traditional 401k money (which was contributed pre-tax) to Roth 401k money (which grows tax-free), you have to pay income tax on the converted amount. That's why you're seeing a taxable amount in box 2a even though you didn't "withdraw" anything. Code G on a 1099-R doesn't always mean a traditional rollover between different accounts. It can also indicate in-plan conversions, automatic plan transfers when providers change, or other internal movements of retirement funds. Since you mentioned finding paperwork about "optimizing your retirement tax strategy," this almost certainly sounds like an in-plan Roth conversion. The good news is there's no early withdrawal penalty - you just need to include that amount as taxable income for the year. Make sure to report the 1099-R correctly on your tax return, and consider setting aside money for the tax bill if you haven't already. Definitely confirm with your plan administrator, but this sounds very straightforward once you know what happened!