Got 1099K from PayPal for sports betting deposits - reporting confusion

You're right to question this. The 1099-K from PayPal is just reporting payment transactions that flowed through their system, not your actual gambling income. It's basically PayPal telling the IRS "this person moved $12,350 through our platform" - but that doesn't mean it's all taxable income. What you need to report on your tax return is your actual gambling winnings and losses. For casual gamblers, winnings go on Schedule 1 as "Other Income" and losses can be claimed as an itemized deduction on Schedule A (but only up to the amount of your winnings, and only if you itemize instead of taking the standard deduction). Your BetRivers win/loss statement is the important document here. It shows your actual gambling activity. If you had a net loss for the year, you'd still need to report any winnings as income, then deduct losses up to that amount if you itemize.

After dealing with this exact situation last year, I found this amazing tool called taxr.ai (https://taxr.ai) that saved me so much stress. I had a similar 1099-K from PayPal for my DraftKings deposits and was completely lost on how to report it properly. What taxr.ai does is analyze your tax documents and situation to give you the exact reporting requirements. I uploaded my 1099-K and my sportsbook win/loss statement, and it immediately identified that I didn't need to report the full 1099-K amount - just my actual gambling winnings. It even showed me exactly where to report everything on my tax forms and explained the whole gambling tax situation in terms I could actually understand.

I was super skeptical about taxr.ai when I first saw it mentioned here (I'm always wary of financial sites), but I was desperate with a similar PayPal 1099-K problem from my BetMGM activity. Tried it last week and now I'm kicking myself for not doing it sooner. It took like 5 minutes to upload my documents and get a complete breakdown of what's actually taxable and what's just movement of my own money. The best part was the explanation about why the 1099-K doesn't match what I need to report - it spelled out exactly how to handle the discrepancy and where each number should go on my return. Saved me like 3 hours of research and probably an expensive call to an accountant.

If you're still struggling to get answers about your sports betting taxes, I had a similar issue and ended up needing to talk directly to the IRS. I spent DAYS trying to get through on their main line before I found Claimyr (https://claimyr.com). They have this service where they navigate the IRS phone system for you and call you back when they have an actual human agent on the line. I was super skeptical, but you can see how it works in this video: https://youtu.be/_kiP6q8DX5c The IRS agent I spoke with confirmed that the 1099-K is just reporting transactions, not income, and explained exactly how to report my gambling winnings and losses properly. Saved me from potentially making a big mistake on my return.

I have to eat my words about Claimyr. After my skeptical comment, I decided to try it anyway since I was desperate for answers about a similar 1099-K issue from DraftKings. I'm shocked that it actually worked exactly as advertised. I signed up, got a call back about an hour later with an IRS agent already on the line. The agent confirmed that I shouldn't report the full 1099-K amount, just my actual gambling winnings, and that I need to keep my win/loss statement in case of questions. Honestly thought it would be a waste of time, but that 10-minute call saved me from making a potentially expensive mistake on my return. The agent even explained how they're seeing tons of these sports betting 1099-K questions this year, so it's a common issue.

Fyi, if you're down for the year overall (lost more than you won), you can only deduct losses up to the amount of your winnings, and ONLY if you itemize deductions instead of taking the standard deduction. So if you won $5000 and lost $8200 (net loss of $3200), you can report $5000 in income and then deduct $5000 in losses on Schedule A if you itemize. The remaining $3200 in losses can't be deducted or carried forward. This is why gambling taxes suck. You pay taxes on wins but can't fully deduct losses unless you're a professional gambler (which has its own strict requirements).

Has anyone actually confirmed this with a tax professional? I'm getting totally different answers from different people about how to handle the 1099K from PayPal for betting deposits.

I went through this exact same situation last year with a 1099-K from PayPal for my Caesars Sportsbook deposits. The key thing to understand is that the 1099-K is NOT a tax document that determines your income - it's just a reporting form that PayPal sends to show payment processing activity. What you actually need to report on your tax return is based on your win/loss statement from BetRivers, not the 1099-K amount. Since you had a net loss of $3,200 for the year, you'll need to look at your actual winnings vs losses from that statement. The tricky part is that even with a net loss, you still need to report any winnings as income, and can only deduct losses up to the amount of winnings (and only if you itemize deductions). Make sure you keep that BetRivers win/loss statement and all your records. The IRS knows that 1099-K forms often include non-taxable transactions like deposits, so having proper documentation of your actual gambling activity is what matters for tax purposes.

I dealt with this exact situation last year and completely understand your frustration! The 1099-K from PayPal is just showing payment transactions - it's not a determination of your taxable income. Think of it like a bank statement showing money moving through an account. Your BetRivers win/loss statement is the key document here. That shows your actual gambling activity for tax purposes. Since you had a net loss of $3,200, you'll still need to report any gross winnings as income, but you can potentially deduct losses up to that amount if you itemize (though as others mentioned, only if itemizing beats your standard deduction). The important thing is keeping good records. Save that win/loss statement, your PayPal transaction history, and any other documentation. The IRS understands that 1099-K forms often include non-income transactions like deposits and transfers. Don't let the 1099-K amount scare you - it's not saying you owe taxes on $12,350. Focus on what your actual gambling results were according to BetRivers' records.

I went through this exact same situation with FanDuel and PayPal last tax season. The stress is real when you see that 1099-K amount! Here's what I learned after consulting with a tax pro: The 1099-K is basically PayPal's way of telling the IRS "hey, this much money flowed through our system for this person" - but it doesn't distinguish between deposits, winnings, withdrawals, or just moving your own money around. Your BetRivers win/loss statement is your golden ticket here. That document shows your actual taxable gambling activity. Since you ended up with a net loss of $3,200, you're not in as bad a spot as you might think. The key is reporting your gross winnings (from the win/loss statement, not the 1099-K) as other income, then if you itemize deductions, you can deduct losses up to that winning amount. But definitely keep that PayPal 1099-K and all your BetRivers documentation together - if the IRS ever asks about the discrepancy, you'll have a clear paper trail showing exactly what those transactions were. Don't let TurboTax's 1099-K prompts stress you out. Focus on your actual gambling results from BetRivers' records, not PayPal's transaction summary.

I just went through this same nightmare with DraftKings and PayPal! Got a 1099-K for over $15K when my actual net gambling income was way less. The confusion comes from PayPal being required to report all transactions over $600 to the IRS, but that doesn't mean it's all taxable income. Those deposits you made to BetRivers are just you moving your own money - not income. Here's what saved me: I called the IRS directly (took forever to get through) and the agent confirmed that I should report based on my actual gambling wins/losses from the sportsbook statement, not the 1099-K amount. The 1099-K is just PayPal covering their reporting requirements. Your BetRivers win/loss statement is what matters for your taxes. Since you had a net loss of $3,200, you'll report your gross winnings as income, then potentially deduct losses up to that amount if you itemize (though only if itemizing beats your standard deduction). Keep all your documentation - the 1099-K, BetRivers statement, and PayPal transaction history. If there's ever a discrepancy question from the IRS, you'll have a clear paper trail showing those were deposits, not winnings. The tax code is brutal for casual gamblers, but at least you're not on the hook for taxes on money that was never actually income to begin with!