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!

Quick suggestion - have you considered forming an actual LLC for your rental property? When my sister and I owned a duplex together with a similar arrangement, our CPA recommended creating an LLC and filing as a partnership (Form 1065). This made the management fee situation much cleaner tax-wise. The LLC would pay my sister a management fee, issue her a 1099, and then we'd get K-1s for our ownership percentages of the remaining profits. Saved us a bunch of headaches and potential audit flags.

Based on what everyone's shared here, it sounds like you're on the right track with treating that 5% as a deductible management fee. I went through something similar with my rental condo and learned a few things the hard way. The key points I'd emphasize: 1) Get that arrangement in writing ASAP if you haven't already - doesn't need to be fancy, just clearly state what services your brother provides for the 5% fee. 2) Make sure you're both handling it correctly on your returns - you deduct it as a business expense, he reports it as self-employment income on Schedule C. 3) Keep detailed monthly records showing the calculation. One thing that caught me off guard was the 1099-NEC requirement mentioned by Ava - if that 5% adds up to more than $600 for the year, you technically need to issue him one. My accountant said this is often overlooked in family arrangements but it's still required. The LLC suggestion from Miguel is worth considering too, especially if you plan to buy more properties together. It does add some complexity but makes everything much cleaner from a tax and liability perspective.