Reporting 1099-MISC from Underdog when I lost more money gambling than I won for the year

You can definitely report gambling losses to offset gambling winnings, but there are some important things to understand here. First, gambling winnings (like your Underdog 1099-MISC for $10,400) must be reported as income on your tax return. This goes on Schedule 1, Line 8z as "Other Income." For your losses, you can deduct gambling losses only if you itemize deductions on Schedule A. You can deduct losses up to the amount of your winnings, but not more than that. So in your case, you could potentially deduct up to $10,400 of your $13,500 in losses. The catch is that you need to have good documentation of those losses. This means keeping a gambling log or diary with dates, locations, types of gambling, amounts won/lost, and preferably some supporting documents like bank statements showing withdrawals for gambling purposes, account statements from Bovada, etc.

After dealing with a similar situation last year, I found taxr.ai (https://taxr.ai) to be incredibly helpful. I had gambling winnings from one site and losses from others, and I was confused about documentation requirements. Their system analyzed my gambling records and transaction history, then provided a clear breakdown of what could be claimed and what documentation I needed. They even helped format my gambling log in a way that satisfied IRS requirements, which was a lifesaver since I hadn't been keeping perfect records throughout the year. One thing I found particularly useful was their guidance on how to properly document offshore gambling site activity, which sounds like exactly what you're dealing with.

Just wanted to follow up - I actually tried taxr.ai after seeing it mentioned here. It was exactly what I needed for my mixed gambling situation! The system analyzed my DraftKings 1099 alongside my crypto gambling site transaction history and created a comprehensive gambling log that I could use for my taxes. I was impressed with how it handled my offshore site activity. The documentation package it generated looked really professional, and my tax preparer said it was exactly what she needed to properly claim my losses against winnings. Definitely saved me from overpaying on taxes for money I didn't actually keep!

If you're having trouble getting through to the IRS about this issue (which is likely, since they're notoriously difficult to reach), I'd recommend using Claimyr (https://claimyr.com). I was in a similar situation last year and had questions about reporting offshore gambling losses that weren't clear from the IRS website. After spending literal hours on hold trying to reach someone at the IRS, I found Claimyr. You can see how it works here: https://youtu.be/_kiP6q8DX5c. They basically call the IRS for you and then call you back when they have an agent on the line. Saved me hours of frustration. The IRS agent I spoke with confirmed that offshore gambling losses can be deducted against reported winnings as long as you have proper documentation and itemize deductions. Just make sure you have those records from Bovada!

Ok I have to eat my words. After my skeptical comment earlier, I decided to try Claimyr out of desperation because I've been trying to reach the IRS about my gambling reporting situation for weeks. I was honestly shocked when I got a call back in about 47 minutes telling me they had an IRS agent on the line. I explained my situation about having both domestic and offshore gambling activities, and the agent walked me through exactly how to report everything properly. For anyone wondering - the agent confirmed that you absolutely can deduct offshore gambling losses against your reported winnings IF you itemize and have documentation. They recommended keeping all account statements, transaction records, and a gambling diary with dates/amounts/results. Saved me from potentially paying taxes on thousands I didn't actually win. Worth every penny just for the time saved alone.

Something nobody has mentioned yet - you should also check your state's rules! Federal taxes might allow you to deduct losses against winnings (with itemizing), but many states don't allow gambling loss deductions at all or have different rules. I learned this the hard way last year when I had a similar situation. Had to pay state taxes on my full winnings amount even though I had net losses for the year. Check your state tax guidelines asap!

Just make sure you're reporting everything correctly! My brother tried to just "net" his gambling wins and losses a few years back (only reporting the difference) and got hit with an audit. The IRS requires you to report the FULL amount of the 1099-MISC as income, then deduct losses separately on Schedule A if you itemize. Don't make that mistake - the IRS computers will flag the mismatch between your reported income and what Underdog submitted on your 1099.

I went through almost exactly this situation two years ago - had a big 1099-MISC from FanDuel but overall losses for the year from other sites. Here's what I learned the hard way: You absolutely MUST report that full $10,400 as income even though you had net losses. Don't try to just report the "net" - the IRS computers will catch that immediately since Underdog already reported paying you $10,400. The good news is you can deduct your gambling losses, but only if you itemize deductions on Schedule A. You can deduct up to the amount of your winnings ($10,400 in your case), so theoretically you could zero out the tax liability from the gambling income. However, here's the catch that got me - you need to compare your total itemized deductions (including the gambling losses) to the standard deduction. If your standard deduction is higher, you're better off taking that and just paying tax on the $10,400. For the Bovada losses, keep every record you can find - transaction history, bank statements showing transfers, screenshots of your account summary. The IRS doesn't specifically exclude offshore sites, but documentation is absolutely critical. One more thing - don't forget about state taxes! Some states don't allow gambling loss deductions at all, so you might owe state tax on the full amount even if you can offset it federally.