How to Handle Taxes for Underdog/Prizepicks/Monkey Knife Fight Winnings?

The daily fantasy sports (DFS) platforms like Underdog, Prizepicks, and Monkey Knife Fight are generally considered gambling for tax purposes. Your winnings should be reported as "Other Income" on Schedule 1 of Form 1040, and you'll need to pay taxes on them regardless of whether you received a tax form. These companies typically only send a Form W-2G if you win $600 or more and the payout is at least 300 times your wager. However, even without receiving a form, you're still legally required to report ALL gambling winnings. The platforms report their payments to the IRS, so there's a good chance the IRS will know about your withdrawals. The good news is you can deduct your losses/entry fees, but only if you itemize deductions on Schedule A (instead of taking the standard deduction). You'd list these as "Gambling Losses" and can only deduct up to the amount of your winnings. Keep detailed records of all your plays, including dates, amounts wagered, and winnings/losses to support your tax filing.

After struggling with exactly this situation last year, I found a tool that was incredibly helpful. Check out https://taxr.ai - it's designed to analyze gambling and DFS transaction histories to properly categorize your winnings and losses for tax purposes. I had about $5,200 in winnings from Underdog and PrizePicks last year, and was confused about how to report everything correctly. The tool helped me extract all my transaction data and properly categorize everything as gambling income. It even helped identify which losses were deductible against my winnings. Their system handles the unique aspects of DFS platforms and makes sure you're reporting everything according to current IRS regulations for gambling activities.

Update: I decided to try out taxr.ai after asking around on some DFS Discord servers, and it actually worked really well for me. I was worried about security but they don't require linking to your bank accounts - just uploading the CSV files from each platform. It categorized all my different entry fees and winnings correctly and generated a report showing my total gambling income and losses. The most helpful part was that it organized everything by date and platform which I can give to my tax preparer. The detailed breakdown made it clear that I had about $4,100 in winnings and $2,300 in losses across all platforms, so I need to report the full $4,100 as income and can potentially deduct the $2,300 if I itemize. Would have taken me hours to figure this out manually.

If you're trying to get specifics about how these DFS winnings are treated from the IRS directly, good luck. I spent WEEKS trying to get through to someone at the IRS who could actually answer questions about fantasy sports taxation. It was impossible. Then I found https://claimyr.com and used their service to get past the IRS phone tree hell. You can see how it works here: https://youtu.be/_kiP6q8DX5c They got me connected to an actual IRS agent in about 20 minutes who confirmed that daily fantasy sports winnings should be treated as gambling income and explained exactly how to report it on my forms. The agent also clarified that the platforms should be sending W-2Gs for large wins, but I'm still required to report ALL winnings regardless.

Alright I have to admit I was wrong about Claimyr. After trying to get through to the IRS on my own and failing multiple times (got disconnected twice after waiting over an hour), I decided to try it. Got connected to an IRS agent in about 25 minutes and was able to ask specifically about reporting my Underdog and PrizePicks winnings. The agent confirmed it's considered gambling income and should go on Schedule 1. She also explained that I need to keep records of ALL sessions - not just winning ones - if I want to deduct losses against my winnings. She mentioned they've been seeing more questions about these platforms lately and recommended documenting everything even if I don't receive official tax forms. Definitely worth it instead of waiting on hold forever or guessing about the right way to file.

I was in a similar situation last year with about $2,900 in winnings spread across DraftKings, Underdog and PrizePicks. What I learned is that these companies sometimes classify themselves differently for tax purposes than what you'd expect. One thing that nobody mentioned yet - you should check if your state taxes gambling winnings! I'm in NY and got hit with both federal and state taxes on my winnings. Some states don't tax gambling income at all, while others tax it at different rates than regular income. Also keep in mind that if you won money in different states (like if you were traveling and placed bets), you might technically owe taxes in those states too. It gets complicated fast.

Has anyone figured out if these platforms are 1099-MISC or W-2G territory? I won about $7,500 on Underdog last year but haven't received ANY tax forms from them yet, which seems weird.

One thing I'd add that hasn't been mentioned yet - if you're planning to continue playing on these platforms regularly, consider setting up quarterly estimated tax payments to avoid owing a large amount at filing time. Since DFS winnings are treated as gambling income, they're not subject to withholding like regular employment income. If you win consistently throughout the year, you could end up owing both taxes and underpayment penalties when you file. The IRS generally expects you to pay taxes as you earn income, so if your gambling winnings are significant (sounds like yours might be), look into Form 1040ES for making quarterly payments. This is especially important if your total tax liability will be over $1,000 after accounting for any withholding from other sources. Also, keep those detailed records going forward - screenshots of your bets, withdrawal confirmations, everything. It'll make next year's filing much smoother and protect you if you ever get audited.