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

What if I didn't keep good records throughout the year? Is there any way to get this information from the apps themselves? And does it make sense to itemize just for the gambling losses if my other deductions aren't that high?

Most DFS platforms have transaction histories you can download that show your deposits, wagers, and withdrawals. Login to each app and look for a "Transaction History" or "Account Statement" option. These records should be sufficient for tax purposes. Whether itemizing makes sense depends on your overall tax situation. Compare your total itemizable deductions (including gambling losses, mortgage interest, charitable contributions, etc.) to the standard deduction ($13,850 for single filers in 2024). If your itemized deductions don't exceed the standard deduction, then it's usually better to take the standard deduction and you won't get the benefit of deducting your gambling losses.

Does it work with all the different platforms? I use Underdog mainly but also have accounts on PrizePicks and a few others. Do I need to download separate reports from each one or can it automatically connect?

I'm kinda skeptical about giving my financial data to some random website. How secure is it? And how do you know the tax advice it gives is actually correct? The IRS penalties for filing incorrectly aren't worth saving a few bucks.

It works with all the major DFS platforms including Underdog, PrizePicks, Monkey Knife Fight, and several others. You'll need to download the transaction history from each platform and upload them to the system, but it handles multiple sources and consolidates everything properly. The site uses bank-level encryption for all data transfers and storage. They don't store your actual banking details, just the transaction records. Their tax guidance is based on current IRS regulations specific to gambling and DFS activities, and they update their system whenever tax laws change. I was initially skeptical too, but their detailed explanation of how DFS winnings are taxed matched exactly what my accountant told me - just much easier to implement.

How does this service actually work? Does it just call the IRS for you? Couldn't you just call yourself and stay on hold?

This sounds like BS honestly. I tried calling the IRS about a different issue last year and waited 3+ hours. No way some service gets you through in 20 minutes unless they're doing something shady or paying someone on the inside.

The service doesn't just call for you - they use technology that maintains your place in the queue and then calls you when an agent is about to pick up. It saves you from having to sit on hold for hours. You still talk directly to the IRS yourself, so it's completely legitimate. No, there's nothing shady happening. They use a system that navigates the phone tree and waits in the queue so you don't have to. The IRS phone system is designed to handle calls in the order received, and this service just holds your place in line without you having to stay on the phone. I was skeptical too, but it worked exactly as advertised and saved me hours of frustration.

Wait, seriously? I never thought about the state tax angle. Do you know if Pennsylvania taxes these winnings? And how would they even know which state I was in when I placed the bets?

Yes, Pennsylvania does tax gambling winnings, including from daily fantasy sports. They're considered taxable income for PA state tax purposes. The apps typically use geolocation to verify you're in a state where their service is legal, so they do have records of where you were physically located when placing bets. In most cases though, you're taxed based on your state of residence rather than where you placed the bet - unless you won a very large amount in another state that might require a separate filing. For casual players, you generally just report the income to your home state.

They should issue a W-2G for gambling winnings if you hit certain thresholds - typically $600+ for a single win that's at least 300x your wager. For your overall winnings of $7,500, they might issue a 1099-MISC if no single win qualified for a W-2G but your total exceeded $600. Check your account settings on the platform - many of them now have tax documents available electronically rather than mailing them. If you still can't find anything, contact their customer support directly. But remember, you're required to report ALL gambling winnings regardless of whether you receive a tax form.

Thanks for clearing that up! I checked my Underdog account and found they actually do have tax forms available in the account settings under "Tax Documents." They issued a 1099-MISC rather than multiple W-2Gs since none of my individual wins were large enough to trigger the W-2G requirement. I guess I'll need to report the full amount on Schedule 1 as gambling income. Wish they'd made it more obvious that the forms were available electronically instead of waiting for something in the mail.

This is really helpful advice about quarterly payments! I hadn't thought about that aspect at all. Do you know what percentage of winnings I should be setting aside for taxes? I'm worried about underpaying and getting hit with penalties, but I also don't want to overpay and tie up money I could be using for more plays. Is there a safe rule of thumb for how much to save from each withdrawal?

@Madison Tipne A good rule of thumb is to set aside 25-30% of your net winnings for taxes, depending on your overall income bracket. This accounts for both federal income tax which (could be 22% or higher depending on your bracket plus) potential state taxes and self-employment considerations. For quarterly payments, you generally need to pay 90% of this year s'tax liability or 100% of last year s'110% (if your prior year AGI was over $150k .)If your gambling income is your only irregular "income," you can base the quarterly payments just on the gambling portion. I d'recommend being conservative and setting aside 30% from each withdrawal - you can always get a refund if you overpay, but underpayment penalties are a pain. Also consider opening a separate savings account just for tax money so you re'not tempted to use it for more plays. The discipline of treating tax money as already "spent will" save you headaches come filing time.

This is exactly the kind of comprehensive breakdown I was looking for! Thank you for sharing your experience. I'm definitely going to download those transaction histories ASAP - I had no idea most platforms had CSV export options built in. One quick follow-up question: when you say "bank records matter" - are you referring to the deposits showing up as income, or do the apps also report the withdrawal amounts directly to the IRS? I'm trying to understand exactly what paper trail exists that the IRS can cross-reference. Also, did your CPA mention anything about whether it matters if you reinvest winnings back into more plays versus withdrawing everything? I tend to leave some balance in the apps to keep playing, but I'm wondering if that affects how I should track things for tax purposes.

@CosmicCadet Great questions! On the bank records - both aspects matter. The platforms report payments to the IRS (usually via 1099s), AND your bank deposits create a paper trail that the IRS can cross-reference during audits. So they can see both what the platforms paid out and what actually hit your bank account. Regarding reinvestment vs. withdrawal - this was actually a key point my CPA emphasized. For tax purposes, you owe taxes on your NET WINNINGS for the year, regardless of whether you withdraw or reinvest. So if you won $5,000 but lost $1,200 in subsequent plays, your taxable gambling income is still the gross $5,000 (you'd potentially deduct the $1,200 separately if itemizing). The important thing is tracking ALL activity - wins, losses, deposits, withdrawals, and balance changes. Your taxable income is based on total winnings during the tax year, not just what you cashed out. Keeping money in the app doesn't defer the tax obligation. My CPA recommended treating each bet/contest as a separate transaction for record-keeping purposes, which makes tracking much easier than trying to figure out "net" positions across time periods.

This is really solid advice about working backwards from transaction histories! I wish I had seen this earlier in the thread. One thing I'd add for anyone just getting started with the record keeping - make sure you're also documenting the dates of your transactions, not just the amounts. The IRS can be particular about when income was actually received vs. when you withdrew it from the platform. I learned this the hard way when I had some December winnings that I didn't withdraw until January - technically that income belongs in the previous tax year even though the cash didn't hit my bank until the following year. Also, for the spreadsheet approach you mentioned - I found it helpful to add a column for "platform fees" since some of these apps charge withdrawal fees that can be documented as gambling-related expenses. Every little deduction helps when you're dealing with gambling income taxes. Thanks for the practical step-by-step approach. Sometimes the tax advice gets too theoretical and it's nice to see someone break it down into actionable steps.

That's awesome that PrizePicks has a "Tax Summary" section! I had no idea they offered that feature. I've been manually calculating everything from my transaction history like a caveman. @MidnightRider Did you find similar tax summary features on Underdog or any other platforms you use? It would save so much time if all these apps provided that kind of breakdown automatically. Also, you made the right call on the standard deduction vs itemizing. With only $800 in losses against the $13,850 standard deduction, itemizing wouldn't make financial sense unless you had significant mortgage interest, charitable contributions, or other deductions to stack on top of it. One more tip for next year - since you're clearly winning consistently, consider setting aside about 25% of your future winnings in a separate account for taxes. That way you won't get hit with a surprise tax bill next season!

@Savannah Vin Great point about setting the date range when downloading those CSV files! I made that same mistake initially and was wondering why my totals seemed low. Another tip I discovered - some platforms like Underdog actually split their transaction history into different categories deposits, (contest entries, winnings, withdrawals ,)so you might need to export multiple reports to get the complete picture. It s'a bit tedious but worth it to make sure you re'capturing everything. Your math on the quarterly payments sounds about right. I ended up owing around $1,200 on $4,500 in winnings last year and definitely got hit with an underpayment penalty. The Form 1040ES for quarterly payments isn t'too complicated to fill out - just base it on your expected annual gambling income and pay 25% of that each quarter. One thing that s'been helpful for me this year is setting up automatic transfers. Every time I withdraw winnings from the apps, I immediately move 30% to a separate tax "savings account." Takes the temptation away to spend that money and makes sure I m'covered come tax time.

This is excellent advice about setting up proper tracking systems going forward! I'm definitely implementing that Google Sheet approach you mentioned. One question about the state tax angle - how do you figure out what your state's specific gambling tax rate is? I tried looking this up for my state but the tax code language is pretty confusing. Is there a reliable resource that breaks down gambling tax rates by state in plain English? Also, regarding treating this as a business activity - at what point does the IRS consider DFS playing to be a business versus just recreational gambling? I've heard conflicting information about whether you can deduct things like internet costs, computer equipment, or research subscriptions if you're doing this seriously enough. Would love to know more about that threshold since I'm spending 10-15 hours a week on research and playing. The tracking system you described sounds way more manageable than trying to reconstruct everything from CSV downloads at tax time. Starting that immediately!

@Kaitlyn Jenkins For state gambling tax rates, I d'recommend checking your state s'Department of Revenue website directly - they usually have a section on gambling income that s'more straightforward than the full tax code. You can also call your state s'taxpayer assistance line; they re'generally more helpful than the IRS for state-specific questions. Regarding the business vs. hobby distinction, the IRS looks at several factors: profit motive, time and effort spent, expertise, success rate, and whether you depend on the income. Spending 10-15 hours weekly on research definitely suggests business-level activity. The key test is whether you re'trying to make a profit and approaching it systematically rather than just for entertainment. If you can establish it as a business, you d'file Schedule C and could potentially deduct research tools, computer equipment prorated (for business use ,)internet costs, and even educational materials. However, this also means you d'owe self-employment taxes on your net profits, so run the numbers carefully. I d'strongly recommend consulting with a tax pro who handles gambling/sports betting clients before making the business election. The deductions can be significant, but the self-employment tax and additional reporting requirements need to be factored in. Many people find the hobby classification ends up being more beneficial overall unless they re'winning substantial amounts consistently.

@Caleb Stark Great question about the timing of wins vs losses! For tax purposes, you ll'owe taxes on your total gross winnings for the entire tax year - so in your case, that $2,800 from March plus any other winnings you had throughout the year, regardless of when the losses occurred. The losses from your rough patch can potentially offset those winnings, but only if you itemize deductions on Schedule A rather (than taking the standard deduction .)Since you d'list gambling losses as an itemized deduction, you can deduct up to the amount of your winnings - so your $2,100 in losses could reduce your taxable gambling income. However, given that the standard deduction is $13,850 for single filers, you d'need that $2,100 in gambling losses PLUS other itemizable deductions mortgage (interest, charitable contributions, etc. to) exceed the standard deduction for it to be worthwhile. If your total itemized deductions don t'beat $13,850, you re'better off taking the standard deduction and just paying taxes on the full gross winnings. The key thing to remember is that it s'an annual calculation, not month-by-month. So your March hot streak and June losses both count toward your 2024 tax year totals. Definitely get those transaction histories downloaded - they ll'show you exactly what your net position was for the year!

@Jungleboo Soletrain That s'a great point about checking the net "deposits vs" net "withdrawals as" a quick sanity check! I hadn t'thought to look at that summary view first before diving into the detailed transaction logs. Your math on setting aside $600-720 sounds right for $2,400 in winnings. I d'probably lean toward the higher end 30% (just) to be safe, especially since you mentioned you re'planning to keep playing. Better to have a little extra set aside than to come up short at tax time. One thing I learned from my experience last year - make sure when you re'setting up those automatic transfers that you re'basing it on your actual withdrawals, not just your account balance. I made the mistake of only transferring tax money when I cashed out, but forgot that I still owed taxes on winnings that I left in my account to keep playing with. The Google Sheets system really is a game-changer for staying organized. Takes literally 30 seconds after each session but saves hours of headache later. Definitely start that habit now while you re'thinking about it!