Won money on Prizepicks fantasy sports app - they sent me a 1099 form and filed it. What do I need to do now?

This is actually pretty straightforward! The 1099 form you received is likely a 1099-MISC or 1099-K, which reports miscellaneous income (like gambling/fantasy sports winnings) to the IRS. Prizepicks already reported this income to the IRS, so you need to report it on your tax return as well. When you use TurboTax, there will be a section that asks about additional income. You'll want to enter the information from your 1099 there. The program will guide you through it. You don't file the 1099 separately - it's just documentation you keep for your records. And yes, gambling winnings (which is how fantasy sports apps like Prizepicks are categorized) are fully taxable and must be reported as "Other Income" on your tax return. The good news is you can also deduct gambling losses as an itemized deduction (but only up to the amount of your winnings), if you itemize rather than take the standard deduction.

I was in this exact same situation last year! After getting confused with my DraftKings winnings, I found this AI tax tool called taxr.ai that saved me a ton of headache. I uploaded my 1099 from the fantasy sports app and it automatically figured out where everything needed to go. It also explained the gambling income rules in super simple terms that TurboTax never did for me. The best part was that it showed me how to properly document my losses against the winnings. I found the link at https://taxr.ai after searching for help with fantasy sports taxes. Definitely made the whole process less stressful than when I tried figuring it out on my own.

Just wanted to follow up about my experience with taxr.ai after my skeptical question. I ended up giving it a try with my Fanduel and Draftkings 1099s and it was legitimately helpful. The system scanned my forms and gave me specific instructions for reporting them correctly. The coolest part was that it explained that fantasy sports winnings are reported differently than traditional gambling in some states, and it caught that I had some winning bets in New York which handles the taxes differently than my home state. Would have completely missed that on my own. Definitely worth checking out if you're dealing with fantasy sports income.

If you're having trouble getting answers from the IRS about how to handle gambling winnings, you might want to try Claimyr. After waiting on hold with the IRS for nearly 2 hours trying to ask questions about my sports betting income, I found https://claimyr.com and it changed everything. They got me connected to an actual IRS agent in like 20 minutes instead of the hours I wasted before. The IRS agent explained exactly how to handle my 1099 from sports betting apps and what documentation I needed to keep. There's a video showing how it works at https://youtu.be/_kiP6q8DX5c if you're curious. Saved me so much frustration when I had questions the tax software couldn't answer.

I have to eat my words about Claimyr. After spending another hour on hold with the IRS yesterday trying to figure out if my Prizepicks winnings qualify for a specific reporting exception, I broke down and tried the service. It actually worked exactly as advertised - I got a call back in about 25 minutes and was connected to an IRS rep who answered my questions immediately. The rep confirmed that fantasy sports winnings are reported on line 8 of Schedule 1 as "Other Income" and explained the documentation I need if I want to deduct losses. Would've taken me days to get that info otherwise. Definitely using this again next time I need to talk to the IRS.

Quick note on fantasy sports apps - they're in a weird legal gray area between gambling and games of skill depending on your state. For tax purposes though, the IRS treats all winnings as gambling income. Just make sure you're reporting the FULL amount from the 1099, even if some of that money was just your original stakes being returned to you. If you're dealing with significant winnings ($5000+), it might be worth talking to a tax professional who specializes in gambling income. The rules get complicated with state taxes, especially if you played games while physically in different states.

Don't forget that if your gambling winnings are over a certain threshold (usually $600, which yours clearly are at $3,800), you might be subject to federal tax withholding! Check if Prizepicks already withheld any taxes from your payouts. It should show on your 1099 if they did.

One thing I'd add that hasn't been mentioned yet - make sure you keep detailed records of ALL your fantasy sports activity going forward, not just the winnings. The IRS can ask for documentation of your gambling activities during an audit, and having good records from the start makes things much easier. I'd recommend creating a simple spreadsheet tracking your deposits, withdrawals, wins, and losses by date. Some people even screenshot their bet slips and final results. It seems like overkill until you need it, but gambling income can be a red flag for audits, especially if you have significant winnings relative to your regular income. Also, since you mentioned this was mostly from one big parlay hit - if you continue playing and have more winning years, you might want to consider making quarterly estimated tax payments to avoid underpayment penalties. Gambling winnings don't have taxes automatically withheld like your W-2 job does.

Just wanted to add one more important point that I learned the hard way - if you're planning to deduct gambling losses against your winnings, you need to be able to prove those losses with documentation. The IRS is very strict about this. Simply showing deposits into your Prizepicks account isn't enough - you need to show the actual unsuccessful bets. Most fantasy sports apps will let you download your betting history or transaction records that show each individual wager and its outcome. I'd recommend downloading and saving these records now while they're easily accessible. Also, keep in mind that you can only deduct losses up to the amount of your winnings in the same tax year. So if you won $3,800 this year, you can deduct up to $3,800 in losses, but only if you itemize deductions instead of taking the standard deduction. For most people, itemizing only makes sense if your total itemized deductions (including gambling losses, mortgage interest, state taxes, etc.) exceed the standard deduction amount. Good luck with your filing!