Looking for advice on filing tax return with significant gambling activity and wins

You'll definitely want to report this correctly to avoid issues with the IRS. Here's what you need to know: For gambling activities, you must report the full amount of your winnings as income on your tax return (Form 1040, Schedule 1). This is your gross winnings, not just your net profit. However, you can deduct your gambling losses as an itemized deduction on Schedule A, but only up to the amount of your winnings. For your specific situation as an advantage player, you'll need those detailed records you mentioned. The IRS will want to see documentation of both wins and losses. This includes dates, specific amounts, type of gambling, location, and even the names of any witnesses if applicable. Since you're doing this at a significant level ($40K in profits), I strongly suggest working with a tax professional who has experience with gambling income. This isn't just about filing correctly - a knowledgeable accountant might help identify additional deductions related to your gambling activities.

I was in a similar position last year with about $25K in advantage play profits. I tried doing my taxes myself at first but got completely overwhelmed with all the documentation. I found this service called https://taxr.ai that specializes in analyzing gambling and betting records for tax purposes. Their system actually scanned all my betting history, bonus offers, and transaction records and organized everything properly for tax reporting. It saved me hours of manually trying to categorize everything, and they have specific knowledge about how advantage play and bonuses should be treated for tax purposes.

Just wanted to follow up after using https://taxr.ai for my gambling taxes. I was super skeptical at first but decided to give it a try since my situation was similar to what was described here. It actually saved me a ton of money! The system properly categorized my bonus hunting activities separate from traditional gambling, which my previous tax preparer had lumped together. They identified several legitimate deductions related to my advantage play that I hadn't considered. What impressed me most was how they handled the documentation - they organized everything in a way that would stand up to IRS scrutiny if I ever got audited. Definitely worth it for anyone doing serious advantage play or bonus hunting.

Have you tried contacting the IRS directly about this? I had a similar situation (not with gambling but with crypto trades) and spent WEEKS trying to get someone on the phone. Finally found this service https://claimyr.com that got me through to an actual IRS agent in about 15 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c The agent I spoke with gave me specific guidance on my situation that none of the online articles covered. Since your situation is pretty specific with the advantage play and bonus hunting, getting direct clarification from the IRS might be worth it. They can tell you exactly how they expect you to report those transactions.

I need to eat my words here. After posting my skeptical comment earlier, I decided to try https://claimyr.com because I'd been trying to reach the IRS about a different issue for nearly a month with no success. To my complete surprise, I was connected to an IRS agent in about 20 minutes. The agent was able to answer my specific questions about reporting requirements that I couldn't find clear answers to online. For anyone dealing with complex tax situations like advantage gambling or anything unusual, getting direct guidance from the IRS can save you from potential issues later. The peace of mind from knowing I'm filing correctly according to the IRS's own guidance was absolutely worth it. Definitely recommend if you're stuck on specific questions about your gambling income reporting.

From my experience as an advantage player, you should really keep track of your play by sessions, not individual bets. The IRS doesn't expect you to list every single wager, but rather to document your gambling by sessions. So for each day at a specific location (whether online or physical), you'd record your net win/loss for that session. This makes it WAY more manageable to report. Just make sure you have the detailed records backing up those session totals in case you get audited.

Just a heads up - I do similar advantage play and got audited last year. The biggest issue wasn't the gambling itself but that I wasn't filing quarterly estimated tax payments. Since there's no withholding on gambling winnings (unlike a regular job), the IRS expects you to make quarterly payments if you're going to owe a significant amount. If you're making $40K profit, you definitely need to be making estimated tax payments throughout the year. Otherwise, you'll get hit with underpayment penalties on top of the taxes you owe.

This is a really complex situation and I appreciate everyone sharing their experiences. As someone who's dealt with similar tax issues, I want to emphasize a few key points: First, the distinction between hobby gambling and professional gambling is crucial for your tax strategy. If the IRS considers you a professional gambler (based on factors like regularity, time invested, expertise, and profit motive), you'd report your income on Schedule C and could deduct business expenses like travel, equipment, and even home office costs. However, you'd also pay self-employment tax. Second, for advantage play specifically, the IRS has been paying more attention to this activity recently. The systematic nature of bonus hunting and arbitrage betting can actually work in your favor for establishing professional status, but it also means you need bulletproof documentation. Third, regarding the services mentioned here - while they might be helpful, make sure any tax professional you work with understands the specific nuances of advantage play. Not all CPAs are familiar with how promotional offers, cashback, and arbitrage betting should be categorized. Finally, consider setting aside 25-30% of your profits for taxes from the start. Gambling income is taxed as ordinary income, so depending on your bracket, you could be looking at a significant tax bill. The quarterly payment advice mentioned earlier is spot-on - don't wait until next April to deal with this. Good luck with your tax planning!