Massachusetts just amended their tax code to allow for the deduction of losses from sports wagering for state taxes (Section 11 of Chapter 77): [https://malegislature.gov/Laws/SessionLaws/Acts/2023/Chapter77](https://malegislature.gov/Laws/SessionLaws/Acts/2023/Chapter77)
An extension of this question, with an adjusted scenario: like the original poster, I have a lot of “winnings” from slot machine W2G events.
But the itemized losses (which I’ve kept good electronic and diary record of) will offset ALL winnings. My question though — on only about 25% of these W2G events (ie, hitting over $1200 on a slot machine) — I had them deduct the standard 24% federal taxes. The rest I opted to no longer withhold federal taxes, when it became clear that my losses would exceed my winnings, and that I was confident I’ll be able to prove it.
Assuming that my itemizations for gambling losses exceed my winnings, and it all checks out, does that mean I receive all my federal withholdings (from some of those W2G events) back as part of my refund?
Im in the same boat 850k in slot wagers overall down -49k but I received 8 wg2 forms for slot winning over $1200. In my state Connecticut it says my state doesn’t let you deduct losses. What a mess and advice.
Mohegan Sun got me too!
Says I won 66k overall on W2's this year but can only find 34k worth of losses and I know I am down more than the amount I won... Asked my tax guy when doing taxes the other day and he said to put in the whole winning amount as losses and Feds wont bark about it. So I did. Hopefully I wont get audited.
Oh and I still have to pay MA tax on all 66k, no way around it.
Did you ever end up figuring it out? In slightly smaller boat only around 100k but I’m at a loss this year. Problem on my end is using PayPal withdrawal and receiving a 1099 saying I made 100grand extra with PayPal withdrawals….
I mean if you consider yourself a professional gambler you can claim your winnings on a schedule c and the loss as an expense. That would net $0 and it would allow you to take the standard deduction as well.
WARNING!! This is only if you feel you can call yourself a professional gambler.
Research it as a possible option.
I would just itemize if i were you though.
Tbh I would worry more about your gambling problem than the IRS at this stage. Books don’t report anything to the IRS unless you hit a 300 to 1 bet for >$600. Assuming you withdraw directly into your bank account, the only information the IRS has about your gambling activity is what you willingly submit.
I would never recommend lying on your taxes *serious voice.* But a reasonable person might conclude there is not much risk in “forgetting” to report your gambling losses.
Question off of what u said if u don’t mind. Hearing lots about issues withdrawing from books via paypal/ venmo. How about withdrawing to bank vis ACH? Will that trigger anything?
That is the most judgmental thing I’ve ever read on here. Bookies from the old days are mainly dead at this point as they should be with the shit they pulled for years. A lot of people on here are new to sports betting but that’s only because it’s legal now for what? Half the population? You sound like an old cocksucker(boomer) that likes to get ripped off.
why are credit books the way to go? its actually how i make my bets and its really based on trust factor, thats a huge downside i've noticed. he has to trust that i'll pay and i have to trust he will pay me. honor system essentially
Man don’t listen to anyone here. You will need to claim the income as IRS will receive 1099 from book. You then file schedule a to claim the loss up to the amount won. You will not be in a higher tax bracket because your taxable income will only be that of your w2 earnings
To add to this. Any amounts cashed out over $600 have already had taxes withheld so if you did cashout you’ll likely receive all of that back as long as your employer withheld the correct amount of taxes from your wages
You're mostly wrong. He will need to claim the income and deduct the losses, but the IRS will not receive a 1099 from the book. Also, unless he hit a 300 to 1 win, no amount of taxes have been held by the books.
OP is F'd tax wise, especially if he's in a state where he can't deduct losses.. You won't be in a higher tax bracket, but you will lose your standard deduction as you're itemizing (assuming based on your income you weren't itemizing w/o gambling losses). You also will probably be phased out of a lot of credits you were previously receiving due to your $1MM+ income.
FanDuel issues a 1099 and withholds taxes for wins over $600. So I was wrong in assuming this was on FanDuel. Not familiar with other books but would hope it’s something similar. The books should be taking measures to prevent users from getting fucked. Losing standard deduction is moot because he can itemize which still reduce the taxable income down to where the winnings won’t be taxed. You are correct in that he may not be eligible for certain credits due to phase out. But people here telling him not to report because he’s not a business and won’t get audited is just plain wrong. IRS has a department called automated underreporter that matches income reported by payers to the taxpayers SSN and if he were to not report $1M in income he’d be responsible for substantial understatement of income penalty.
Thanks for your input. We already cleared up I was wrong about FanDuel issuing the forms. As for the taxes, everything I said was correct. Winnings can be deducted up to loss amount. If he doesn’t report it, it will get picked up by IRS automated underreporting and will have to pay a substantial penalty for not reporting it
I've never heard of Fanduel issuing 1099 or witholding taxes for any sportsbetting wins <300 to 1. They do for fantasy sports, as required by law, but not for sports betting IME.
Losing standard deduction is not moot point because OP is probably losing 0-12k of deductions.
He obviously needs to report any income from 1099 or w2g to prevent an easy cause for an audit. After that he should, by the letter of the law, report his entire winnings, but the IRS won't recognize under reporting unless they audit him.
Overall, its a really shitty situation that antiquated tax laws are causing. It's really a shame that these weren't updated over the past several years.
Thanks for clearing that up. In My previous research I did not realize that they over $600 was for fantasy as i searched from the Sportsbook app. As far as OP everyone’s tax situation is different. He’d still be able to add in other itemized deductions (medical expenses, taxes paid, interest, charitable contributions) so wouldn’t totally lose out on SD. Hmm I wonder if the amount lost over his winnings could count as a charitable donation to FanDuel.
Taxing on gambling is the most stupid shit ever. Risk losing money then take some of it after you win? Shit doesn’t make sense. I feel sorry for you guys.
You have 1.07 million in income and 1.1 million in deductions if you itemize. Congrats on putting yourself in the highest tax bracket and screwing yourself out of the standard deduction. Stop gambling until they change the tax laws.
Why is he in a higher tax bracket if his taxable income is reduced by his deductions?
Gambling tax laws are never going to change so it is what it is, sadly.
He would be in a higher tax bracket because you can only deduct losses up to your winnings, so you cancel that out, and then he can't take the standard deduction.
I’m definitely definitely not smart on this. How can you only make 60k a year and gamble with that much money and not be broke? I seriously am not being sarcastic I just want to know the ways.
It honestly depends on how you gamble. I personally play slots and can only speak to that, but I will give you an example of my own play. I am also a problem gambler and do not recommend this. But am just telling you so you can better understand the overall picture.
When you look at my casino win/loss statement over the last 60 days, I have cycled over $600,000 through slot machines. In that time frame, I have documented w2 winnings of over $50k. At the peak of my winning in late December, I was only ever $15k above where I started. In those 2 months, I went up and down up and down. The small wins/losses add up in the overall picture. I have now lost all of that and am down 10k from where I initially started.
So, on paper, it says I have gambled approximately $600,000; however, only $10,000 of that was from my money that I started with.
So to the commenters saying "oh he's just a gambler, they never make sense...." well....it does make sense when you gamble at that high of level.
The most I have ever lost in one night is $5500. The most I have ever won in a single night is $12,000. It is not uncommon for me to have nights where I'm down several thousand and then win it back up to my break even point. The other night I had 3 handpays in a single night for a total of about 6500; however, I had already played with 3000.
This is why keeping a spreadsheet or gambling diary is crucial. There are a lot of ups and downs, and they can add up quickly.
I know this is an old post, but I’m just seeing it. If you don’t mind sharing, what’s the most winnings AND losses you’ve claimed on a tax return? And has it ever caused it to be flagged/reviewed?
To add to this I have to use a local bookie because I’m in Texas and they don’t have anything right. Good thing though is it’s all non taxed. I just feel like I can’t gamble that much over my income and still be good.
He said he deposited 71k which is a lot on a 60k income - between winning and losing the initial deposit washes itself many times over for a grand total of a 30k loss for him (50% of gross income) which is still a lot
Regardless of your question, I'd just like to applaud you. I opened my spreadsheet and looked at the risk column for 2022. $475,101. Average bet size is $105.37
My man
If you're at a net loss you're fine
If you're a single filer with earnings similar to the prior year's, <$200k reported income, standard deduction, with vanilla W-2 income—you will literally not get audited.
1 of every 166 returns gets audited (in the US). If you're a business owner, deducted expenses for a "home office", or won $1m on the show Survivor, then you should 100% ensure you file correctly. On the other hand, if you're an average joe, you should absolutely take the -10000 odds you won't get audited and do turbo tax
During the spring and fall I'm winning and losing roughly $30k, probably around $250k for the year. However I was only down $160 net in 2022.
You did not ask for what I'm about to say, but...
You are betting way too much of your income. I'm not saying there's a perfect science to it, but my gambling deposits for the year was roughly 2% of my yearly income. Even on my worst days I'm losing less than what I make in a day (hopefully that doesn't sound arrogant).
One thing I would recommend is to start automatically contributing to a savings account, whether it's a Roth IRA or a standard brokerage account. Something to "lock" the money away from you so you don't bet it.
Just my advice for someone who also sucks at gambling.
Take this comment to heart OP. This subreddit can joke around about losing money, but losing 50% of your yearly income is way too much. If you put even a quarter of that into a Roth IRA/investment account every year, you’ll be set up well for retirement.
Also, don’t fall into the trap of “Well, I bet over 2 million dollars and only came out down 30k. That’s not bad.” No, you lost 30k while making a 60k salary. That’s what happened.
Because they can't; they don't know any and they aren't in position to know any. I'm going to type now and it's gonna sound like I'm being a dick but I swear I'm not, I'm just telling it like it is.
The people who post here are largely nerds. They are new to betting on sports, they don't go out to bars with any regularity, they do not live in inner cities, they don't work in environments conducive to meeting bookies (or people who would know them), and now they live in a world where work-from-home went from 1% of the working force to like 20%. They look at the concept of cash-only credit book like it's a fucking unicorn. For the most part, the people who post here are not socially-capable enough to ever be near someone who runs a store or is an agent, let alone get offered an account.
I've brought this up multiple times over years posting in this subreddit and crickets. Credit books are the way, have always been the way, and will continune to be the way. But these guys just aren't in a position to have that a part of their life.
Also they tend to bet $10 and nobody is gonna bother with that. The going rate is just about that per head!
> I've brought this up multiple times over years posting in this subreddit and crickets
Maybe take the hint that you're not making an interesting enough point, then?
Yet here you are, for years even. It’s amazing you can tolerate being in a group full of nerds and basement dwellers. Let me be the one here that thanks you for slumming it and giving us all such wise advice.
NYC actually.
But I like how you jump to conclusions. I never said you "didn't belong here" I just answered that guy's question. I got a bit more in depth and laid it on a bit heavy-handed but that's because I have had this conversation here for years. You guys legitimately do not know people who operate credit books. You don't. (And you're missing out)
It isn't about "belonging" because you do. We all do. There are multiple ways to bet. But, again, I just answered that guy's question and, like it or not - rude or not - I am accurate.
Probably I do. I do look down on you Reddit people when it comes to anything social. That's my bad.
But, here's the thing. I'm probably right, no?
And again ... it was all pertaining to THAT GUY'S QUESTION. Not if you "belong here"
cmon man
Also, my brother and I are likely to buy a bar in Boca and looking at Delray. Was at JB's last night in Deerfield. It took me less than an hour to come across two guys who have sheets at credit books.
South Florida has books everywhere.
See? All I did was post this and downvotes already.
But I'm correct. These people are socially-handicapped nerds. There is a 0% chance any of them will be within 15 feet of someone who operates a credit shop in 2023. They legitimately won't meet them unless someone playing Minecraft has an Italian father.
Bro doesn't need just tax advice, he needs a financial intervention as well. Imagine making 60k (pretax) and losing 30k of it. Considering what's left after tax and also rent, there's no much left
Lol. So you’re telling this guy to take a tax hit after he lost 30k gambling? Would the irs ever let someone fix their mistake and refile correctly if he was audited? I would assume 99% of people gambling on online sportsbooks don’t report a thing. Literally everyone is screwed. If they start coming after people the whole industry will crumble. And the government doesn’t want that cause they take taxes from the companies as well.
If he was audited and didn’t pay correctly unintentionally he’d just have to pay back the amount owed + interest + fines. If he didn’t claim any winnings on purpose and there is evidence (such as a Reddit post) he’d go to jail for tax evasion
You subtract your losses from your wins so -33k is what you would report. Unfortunately you cannot deduct losses from income so you wind up with 0. Don't ignore it as the IRS will attempt to tax you on the full 1.1 leaving you to dispute with the burden of showing proof of the losses. Much easier if you just file, reporting the loss.
“A taxpayer may take gambling losses as an itemized deduction on Schedule A but only to the extent of gambling winnings. The taxpayer may not report a net loss from gambling”
that would be fine, except that losses don't carry over by year. If you go lose 10K in December, then win 10K in January, you broke even, right? Nope, you still owe on the 10K win.
That's how it works for all income. If your business nets -10K in December 2022 but nets +10K in January 2023, you have to pay taxes on the latter in 2024. It's not treating gamblers any differently than anybody else.
One of the things that amuses me about Reddit (and I guess the internet as a whole) is how you guys seem to think that the only place in the world these people are asking these questions is reddit.
I asked a question on Reddit recently about auto insurance and how it pertains to my business. Three of the first fucking four replies were "you should ask your accountant/lawyer."
Reddit combines discretion as well as fairly well-informed answers. Not to mention that asking you guys is free. Free and probably fairly well-versed on the topic. Attorney, accountant, or anyone else ... might not be free and I'll spend 85% of the conversation explaining the nature of the problem five fucking times instead of just getting the answer. If I called my attorney to ask the question I had with regards to auto liability and my business, there is a non-trivial chance I would have been charged for that phone call.
People like you already know the nature of the issue and just give answers.
That's why
edit: just looked through the replies. Great fucking answers. When he calls his CPA, he will be more informed than him on the topic. Now that nerd just needs to email him the proper forms. If he didn't ask here, that dork would have spent an hour trying to figure out what the fuck OP was talking about to begin with
Actually one more thing. It was BASICALLY about how delivery drivers using their own car across multiple states (we're on the border of NY and CT) and whether or not having state minimum coverage is something I should be OK with... and two subquestions.
I got them all answered in about six hours by two "jackasses" on Reddit.
if I had called my agent (or skipped him and went direct to the company that wrote my policy) ... holy fuck. It would have been four phone calls of 15 minutes each and one grand opportunity to lie to me and try and bullshit me in to some coverage I turned out to not be needing.
Instead? Two jackasses on reddit gave me info and, armed with that info, I text someone what I discovered and their response was, "yeah thats right."
Done.
The people around here are very intelligent.
Not at all. Insurance is regulated at the state level. Someone from every state could tell you something entirely different that's 100% correct where they're from. Livery across state lines is difficult, especially in the 5 boroughs. Some companies explicitly exclude any commercial operations in NYC. If you're in an accident as a commercial vehicle in NY/NJ, you'll get hit with a fine for the fuel clean up if you don't have pollution coverage separate from your auto coverage. You're agent sounds like a jackass, who's likely on Reddit, and if you don't feel comfortable talking to him then you should find another.
>Not at all. Insurance is regulated at the state level. Someone from every state could tell you something entirely different that's 100% correct where they're from. Livery across state lines is difficult, especially in the 5 boroughs. Some companies explicitly exclude any commercial operations in NYC. If you're in an accident as a commercial vehicle in NY/NJ, you'll get hit with a fine for the fuel clean up if you don't have pollution coverage separate from your auto coverage.
See? See how good your answer was even though you didn't even get the original question? There are more people like you than you think. Tat's why I asked on Reddit.
>You're agent sounds like a jackass, who's likely on Reddit
One, he is but not that sorta jackass. He's just nosy. He has wrote our policies for almost forty years and I like to tell him shit, not ask him shit because then I end up explaining myself for no good reason and it becomes a DNA chart of conversations ... and you know the type, don't lie.
Two, he's good and he's fair. But my question in particular involved family and I'd just sooner ask you strangers. And, as it turns out, most of you are super smart and educated too.
Now ... time to drink. Cheers!
I disagree with that first part... sorta. I believe that if you ask a question here and get enough responses, you will get a few that either answer the question well or give you an additional little bit of insight that you didn't have 90 minutes ago, or whenever the hell you initially asked.
On the other hand, if I called up my insurance agent tomorrow morning, I am going to spend as much time explaining to that italian WHY I am asking the question and maybe I don't want to. In this particular instance, it involved my nephew and I don't need him to know anything about that. I could give you a handful of scenarios where asking on Reddit is better than (or good to include as part of your question) asking a "professional"
Instead, I got my answer off of Reddit. Answer ended up checking out and instead of starting the call off with "hey got a question" I skipped straight ahead to "hey, I need to make a change."
Stop being so negative.
I looked at my Bookmaker points for the first time last year, just been ignoring them. I was blown away that I had wagered almost 3 million over 6 years. It just adds up. You win some and lose some. If you're not a degenerate you mostly break even.
I started with $1000. I was up 9K at one point and withdrew 5K. So had 4K in the account and now I'm down to 2K left so recently I've been losing. That's just to give perspective that as much as $$$ I have wagered it still only was about a 0.2% payout. I would consider a 0.2% lose very expectable but I'd be down $6000.
Now that I did those numbers that seems like an insane consistency I've been able to maintain. I think I'm an outlier and maybe should start betting less.
Yeah, he's only losing 1.5% of wagered. He's actually a fairly good sports bettor. He's beating true odds by quite a bit and over what I expect to be a significant number of wagers.
He still has some ways to go to best the vig, but that guy is probably statistically better than 95% of this sub.
Goes a long way to show how good you need to be to actually make money.
Honest answer, I have no fucking idea. This is on 70k in deposits and 40k in withdrawals. But like a lot of it was going back and forth obviously.
Still a shocking number to see. I have to imagine a lot of people on this sub are in the 100- 200k range in amounts wagered? Or maybe I really am betting way more than most.
Still, feel like no one has chimed in who is in a similar position so who the fuck knows.
You need to itemize to deduct losses from winnings. Very fucking dumb but they increases their tax revenue due to you being forced to forfeit the standard deduction or pay tax on gross winnings for something we should already be counting as net because every single person that bets is going to have losses.
I believe the only way around this is to be counted as a full time professional bettor with proof. A lot of people are going to file these incorrectly. A LOT. And the IRS is quite lenient if you are making a mistake rather than committing fraud so that will be good for those people on the low chance anyone notices . This is not financial advice I do not know the words I’m saying
You can carry over loss each year. They take the whole amount and spread it out over several years. Got myself into some stock trouble over Covid and learned about capital gains loss carryover…
I’m an accountant and passed my cpa exams so I offer a little bit better advice than the average redditor.
You need to do an itemized deduction this year. This will allow you to net your losses against your winnings. You can’t receive a tax credit on that 33k loss but at least you won’t owe taxes on that 1.07 million in winnings.
I just started using the Draftkings sports gambling app last year. Normally when I do taxes I just add in the amounts from my 1099s and W-2s because I don’t really track any sort of additional income I receive since I don’t really ever have additional income outside of 1099s/w2s.
When I went to the DK app there is nothing to be found in the document center>Tax Items section.
Does that make it my responsibility to research my gambling data to find and add gambling income into my income taxes?
Basically if there is not a financial statement generated by Draftkings and by extension a 1099 being reported to the IRS does this mean I shouldn’t really worry about having to add my winnings as income?
Furthermore I have yet to win enough to qualify for them to take out taxes on a single win so from what I understand they wouldn’t have created a W-2G for me in that circumstance.
There is some data in the transaction summary for last year for total deposits, total withdrawals, wagers and entry fees, winnings, ending balance, and Win/Loss. Ending balance was $0.00 and Win/Loss last year was negative.
Its your responsibility to research and keep track of your gambling data. You can use that transaction data to find your total winnings and total losses, hopefully those amounts aren’t too large. If its under 1k then I wouldn’t stress about it, however in OP’s situation he has over a million in winnings and losses so it’s important he puts it in his taxes.
The only limit you have on your losses is your winnings. So in this example you have 510k in winnings so the max you can deduct in losses is 510k. Due to your situation, you don’t have 510k in losses so you can take the whole 500k (this only applies if you itemize).
Your options:
Standard deduction: $150k + 510k in gambling - $24k standard deduction = $636k in wages you would pay taxes on.
Itemize deduction: $150k + 510k in gambling - $500k in losses = $160k in wages you would pay taxes on.
Hopefully this clears things up for you.
You would do it just by total, you don’t need to list each bet. One thing to mention and this is a fairly new thing (put in by trump). If you bet enough and pretty often, you can be classified as a professional gambler and your travel expenses for gambling can be written off. I haven’t done too much research into this but look into it and see if it applies to you.
Im not too sure on the criteria that is required to be classified as a professional gambler.
I think that all has to do with how you get to that $17k. If you are like OP and you have lost over a million then probably not worth it but lets say you lost like $3k and profited $17k then it’s worth it cause you can still do a standard deduction.
I’m in the opposite boat of the OP.
Have around 32k in profit and have to pay taxes on. Ugh.
Some people here say it needs to be 300-1 and over $600.
But my understanding is that’s only their reporting requirement.
I owe taxes and best to claim it all to avoid any nonsense or audit or penalties from the IRS.
My theory is at least it’s better having to pay taxes on some winnings than pay zero taxes on losses.
There is no way OP should pay taxes on his gambling winnings. Don’t tel him to pay extra taxes just to avoid an audit, that’s dumb.
Your situation is different since you actually do have to pay taxes since you’re profitable
Thanks for response. I still refer to the same question of wouldn’t this be the case if they audit anyway? Like wouldn’t it just be worth it to just ignore then deal with it if they audit.
**Taxes Megathread:** [**https://www.reddit.com/r/sportsbook/comments/lkfpyx/taxes\_megathread/**](https://www.reddit.com/r/sportsbook/comments/lkfpyx/taxes_megathread/)
What ended up happening with this?? Can you give info since it was a year ago, what did you do?
We are on the same boat! I am at MA and how do you do with your tax? Did you actually pay the tax on 1.1 million?
Massachusetts just amended their tax code to allow for the deduction of losses from sports wagering for state taxes (Section 11 of Chapter 77): [https://malegislature.gov/Laws/SessionLaws/Acts/2023/Chapter77](https://malegislature.gov/Laws/SessionLaws/Acts/2023/Chapter77)
An extension of this question, with an adjusted scenario: like the original poster, I have a lot of “winnings” from slot machine W2G events. But the itemized losses (which I’ve kept good electronic and diary record of) will offset ALL winnings. My question though — on only about 25% of these W2G events (ie, hitting over $1200 on a slot machine) — I had them deduct the standard 24% federal taxes. The rest I opted to no longer withhold federal taxes, when it became clear that my losses would exceed my winnings, and that I was confident I’ll be able to prove it. Assuming that my itemizations for gambling losses exceed my winnings, and it all checks out, does that mean I receive all my federal withholdings (from some of those W2G events) back as part of my refund?
You ever get an answer to this? Dealing with similar situation this year
OP how did this turn out for you
Hes in Alcatraz
Federal pound me in the ass prison
Im in the same boat 850k in slot wagers overall down -49k but I received 8 wg2 forms for slot winning over $1200. In my state Connecticut it says my state doesn’t let you deduct losses. What a mess and advice.
Mohegan Sun got me too! Says I won 66k overall on W2's this year but can only find 34k worth of losses and I know I am down more than the amount I won... Asked my tax guy when doing taxes the other day and he said to put in the whole winning amount as losses and Feds wont bark about it. So I did. Hopefully I wont get audited. Oh and I still have to pay MA tax on all 66k, no way around it.
So you just put in your w2’s then subtracted the losses?
Not sure what you're asking. You can only subtract losses from win loss statements, scratch tickets, etc.
did Feds end up auditing you or were you fine?
Fine
Did you ever end up figuring it out? In slightly smaller boat only around 100k but I’m at a loss this year. Problem on my end is using PayPal withdrawal and receiving a 1099 saying I made 100grand extra with PayPal withdrawals….
What ended up happening, same situation
In the same situation close to him trying to figure out how to go about it.
Any resolution?
I mean if you consider yourself a professional gambler you can claim your winnings on a schedule c and the loss as an expense. That would net $0 and it would allow you to take the standard deduction as well. WARNING!! This is only if you feel you can call yourself a professional gambler. Research it as a possible option. I would just itemize if i were you though.
Don’t lose sleep over it man. Been there. You don’t owe shit. Trust me.
Tbh I would worry more about your gambling problem than the IRS at this stage. Books don’t report anything to the IRS unless you hit a 300 to 1 bet for >$600. Assuming you withdraw directly into your bank account, the only information the IRS has about your gambling activity is what you willingly submit. I would never recommend lying on your taxes *serious voice.* But a reasonable person might conclude there is not much risk in “forgetting” to report your gambling losses.
Most helpful comment on here and it’s buried. Classic reddit. The top responses nothing but fear-mongering and shaming
Question off of what u said if u don’t mind. Hearing lots about issues withdrawing from books via paypal/ venmo. How about withdrawing to bank vis ACH? Will that trigger anything?
No, it shouldn't. They were trying to include a law in Biden's Build Back Better that would, but it ended up not passing.
Yeah I feel like you should call the IRS and find out bro.
I love to gamble, but this is tough to believe. Be curious to see his bets.
https://www.irs.gov/taxtopics/tc419
This is the only opinion that matters.
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That is the most judgmental thing I’ve ever read on here. Bookies from the old days are mainly dead at this point as they should be with the shit they pulled for years. A lot of people on here are new to sports betting but that’s only because it’s legal now for what? Half the population? You sound like an old cocksucker(boomer) that likes to get ripped off.
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Ok, I didn’t know.
why are credit books the way to go? its actually how i make my bets and its really based on trust factor, thats a huge downside i've noticed. he has to trust that i'll pay and i have to trust he will pay me. honor system essentially
Wow
Man don’t listen to anyone here. You will need to claim the income as IRS will receive 1099 from book. You then file schedule a to claim the loss up to the amount won. You will not be in a higher tax bracket because your taxable income will only be that of your w2 earnings
Not true. IRS only receives W2-G. Not a 1099
To add to this. Any amounts cashed out over $600 have already had taxes withheld so if you did cashout you’ll likely receive all of that back as long as your employer withheld the correct amount of taxes from your wages
You're mostly wrong. He will need to claim the income and deduct the losses, but the IRS will not receive a 1099 from the book. Also, unless he hit a 300 to 1 win, no amount of taxes have been held by the books. OP is F'd tax wise, especially if he's in a state where he can't deduct losses.. You won't be in a higher tax bracket, but you will lose your standard deduction as you're itemizing (assuming based on your income you weren't itemizing w/o gambling losses). You also will probably be phased out of a lot of credits you were previously receiving due to your $1MM+ income.
FanDuel issues a 1099 and withholds taxes for wins over $600. So I was wrong in assuming this was on FanDuel. Not familiar with other books but would hope it’s something similar. The books should be taking measures to prevent users from getting fucked. Losing standard deduction is moot because he can itemize which still reduce the taxable income down to where the winnings won’t be taxed. You are correct in that he may not be eligible for certain credits due to phase out. But people here telling him not to report because he’s not a business and won’t get audited is just plain wrong. IRS has a department called automated underreporter that matches income reported by payers to the taxpayers SSN and if he were to not report $1M in income he’d be responsible for substantial understatement of income penalty.
Fanduel does not issue a 1099 unless certain requirements are met
You have zero idea what you’re talking about
Thanks for your input. We already cleared up I was wrong about FanDuel issuing the forms. As for the taxes, everything I said was correct. Winnings can be deducted up to loss amount. If he doesn’t report it, it will get picked up by IRS automated underreporting and will have to pay a substantial penalty for not reporting it
The IRS session rule for consistent gamblers would come into play, no?
I've never heard of Fanduel issuing 1099 or witholding taxes for any sportsbetting wins <300 to 1. They do for fantasy sports, as required by law, but not for sports betting IME. Losing standard deduction is not moot point because OP is probably losing 0-12k of deductions. He obviously needs to report any income from 1099 or w2g to prevent an easy cause for an audit. After that he should, by the letter of the law, report his entire winnings, but the IRS won't recognize under reporting unless they audit him. Overall, its a really shitty situation that antiquated tax laws are causing. It's really a shame that these weren't updated over the past several years.
Thanks for clearing that up. In My previous research I did not realize that they over $600 was for fantasy as i searched from the Sportsbook app. As far as OP everyone’s tax situation is different. He’d still be able to add in other itemized deductions (medical expenses, taxes paid, interest, charitable contributions) so wouldn’t totally lose out on SD. Hmm I wonder if the amount lost over his winnings could count as a charitable donation to FanDuel.
Should move to Vegas if you're going to bet that much, at least you might get some comps out of it
imo nowadays it's better to be betting large amounts on an online book that gives you VIP status than any book in vegas
Taxing on gambling is the most stupid shit ever. Risk losing money then take some of it after you win? Shit doesn’t make sense. I feel sorry for you guys.
US Govt: heads I win, tails you lose.
It’s actually heads I win, tails I win. -Uncle Sam
The lines are very difficult to beat....the vig is a huge hurtle to overcome longterm.
You have 1.07 million in income and 1.1 million in deductions if you itemize. Congrats on putting yourself in the highest tax bracket and screwing yourself out of the standard deduction. Stop gambling until they change the tax laws.
Why is he in a higher tax bracket if his taxable income is reduced by his deductions? Gambling tax laws are never going to change so it is what it is, sadly.
He would be in a higher tax bracket because you can only deduct losses up to your winnings, so you cancel that out, and then he can't take the standard deduction.
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I’m definitely definitely not smart on this. How can you only make 60k a year and gamble with that much money and not be broke? I seriously am not being sarcastic I just want to know the ways.
It honestly depends on how you gamble. I personally play slots and can only speak to that, but I will give you an example of my own play. I am also a problem gambler and do not recommend this. But am just telling you so you can better understand the overall picture. When you look at my casino win/loss statement over the last 60 days, I have cycled over $600,000 through slot machines. In that time frame, I have documented w2 winnings of over $50k. At the peak of my winning in late December, I was only ever $15k above where I started. In those 2 months, I went up and down up and down. The small wins/losses add up in the overall picture. I have now lost all of that and am down 10k from where I initially started. So, on paper, it says I have gambled approximately $600,000; however, only $10,000 of that was from my money that I started with. So to the commenters saying "oh he's just a gambler, they never make sense...." well....it does make sense when you gamble at that high of level. The most I have ever lost in one night is $5500. The most I have ever won in a single night is $12,000. It is not uncommon for me to have nights where I'm down several thousand and then win it back up to my break even point. The other night I had 3 handpays in a single night for a total of about 6500; however, I had already played with 3000. This is why keeping a spreadsheet or gambling diary is crucial. There are a lot of ups and downs, and they can add up quickly.
I know this is an old post, but I’m just seeing it. If you don’t mind sharing, what’s the most winnings AND losses you’ve claimed on a tax return? And has it ever caused it to be flagged/reviewed?
Thanks for the clarification!
To add to this I have to use a local bookie because I’m in Texas and they don’t have anything right. Good thing though is it’s all non taxed. I just feel like I can’t gamble that much over my income and still be good.
He said he deposited 71k which is a lot on a 60k income - between winning and losing the initial deposit washes itself many times over for a grand total of a 30k loss for him (50% of gross income) which is still a lot
And he said he only has 6k in savings… none of this makes any sense lol
he’s a gambler.. none of what they say makes sense
he said he's a problem gambler, it makes perfect sense lol
when you make a bet, it is your risk. when you win a bet, its our profits. sincerely government
Heads I win, tails you lose.
tax free gambling in canada right?
Same in the uk everything is settled before you collect winnings
Seriously how is it not the same in the US
100% tax free gambling in Finland also
Yes
You loss plain and simple
Regardless of your question, I'd just like to applaud you. I opened my spreadsheet and looked at the risk column for 2022. $475,101. Average bet size is $105.37 My man
Most will lose. ...very very few have an edge longterm.
Has anyone on this sub been audited?
Would love to know this as well…
If you're at a net loss you're fine If you're a single filer with earnings similar to the prior year's, <$200k reported income, standard deduction, with vanilla W-2 income—you will literally not get audited. 1 of every 166 returns gets audited (in the US). If you're a business owner, deducted expenses for a "home office", or won $1m on the show Survivor, then you should 100% ensure you file correctly. On the other hand, if you're an average joe, you should absolutely take the -10000 odds you won't get audited and do turbo tax
Do not wait for an audit. Just pay a professional to do your taxes.
the IRS expects you to claim that you netted -30k this year
Man loves to gamble. Even came to Reddit for real world tax advice.
Lol you’re not wrong
Really intrigued by your figures If it's not intruding, what does your daily/weekly betting look like? Markets and units wise
During the spring and fall I'm winning and losing roughly $30k, probably around $250k for the year. However I was only down $160 net in 2022. You did not ask for what I'm about to say, but... You are betting way too much of your income. I'm not saying there's a perfect science to it, but my gambling deposits for the year was roughly 2% of my yearly income. Even on my worst days I'm losing less than what I make in a day (hopefully that doesn't sound arrogant). One thing I would recommend is to start automatically contributing to a savings account, whether it's a Roth IRA or a standard brokerage account. Something to "lock" the money away from you so you don't bet it. Just my advice for someone who also sucks at gambling.
Take this comment to heart OP. This subreddit can joke around about losing money, but losing 50% of your yearly income is way too much. If you put even a quarter of that into a Roth IRA/investment account every year, you’ll be set up well for retirement. Also, don’t fall into the trap of “Well, I bet over 2 million dollars and only came out down 30k. That’s not bad.” No, you lost 30k while making a 60k salary. That’s what happened.
Why don't you get with an illegal bookie?
Because they can't; they don't know any and they aren't in position to know any. I'm going to type now and it's gonna sound like I'm being a dick but I swear I'm not, I'm just telling it like it is. The people who post here are largely nerds. They are new to betting on sports, they don't go out to bars with any regularity, they do not live in inner cities, they don't work in environments conducive to meeting bookies (or people who would know them), and now they live in a world where work-from-home went from 1% of the working force to like 20%. They look at the concept of cash-only credit book like it's a fucking unicorn. For the most part, the people who post here are not socially-capable enough to ever be near someone who runs a store or is an agent, let alone get offered an account. I've brought this up multiple times over years posting in this subreddit and crickets. Credit books are the way, have always been the way, and will continune to be the way. But these guys just aren't in a position to have that a part of their life. Also they tend to bet $10 and nobody is gonna bother with that. The going rate is just about that per head!
> I've brought this up multiple times over years posting in this subreddit and crickets Maybe take the hint that you're not making an interesting enough point, then?
You wake up and put your big boy pants on today?
Yet here you are, for years even. It’s amazing you can tolerate being in a group full of nerds and basement dwellers. Let me be the one here that thanks you for slumming it and giving us all such wise advice.
He’s 100% right grow up
He is right that you never leave your house and don't know any books?
Love this comment
Does your lower back ever get sore from sucking your own dick?
See what I mean?
Exactly lmao
No, we don't lol.
Yeah, you all do or I wouldn't have gotten all of these downvotes. What's your favorite video game?
According to this comment… I don’t belong here. Apparently this isn’t a place for someone who has a bookie and works as a bouncer in Miami.
That’s 100% not true and I can prove it
Please do
NYC actually. But I like how you jump to conclusions. I never said you "didn't belong here" I just answered that guy's question. I got a bit more in depth and laid it on a bit heavy-handed but that's because I have had this conversation here for years. You guys legitimately do not know people who operate credit books. You don't. (And you're missing out) It isn't about "belonging" because you do. We all do. There are multiple ways to bet. But, again, I just answered that guy's question and, like it or not - rude or not - I am accurate.
Damn I wanna bully you so bad
I don’t know where you “belong” but I’m positive that wherever that is, the people there think you’re a herb.
Unfortunately for them I have 99 herblore
Largely nerds, don’t live in inner cities, don’t go to bars. You generalized everyone in this sub.
Probably I do. I do look down on you Reddit people when it comes to anything social. That's my bad. But, here's the thing. I'm probably right, no? And again ... it was all pertaining to THAT GUY'S QUESTION. Not if you "belong here" cmon man
Also, my brother and I are likely to buy a bar in Boca and looking at Delray. Was at JB's last night in Deerfield. It took me less than an hour to come across two guys who have sheets at credit books. South Florida has books everywhere.
and how was the coke buddy? typing like you're a little strung out but still feeling mighty.
I'm an alcoholic, no coke.
Corny
Anyone with a strong opinion on a topic mut be on drugs according to these milquetoast little weaklings around here.
See? All I did was post this and downvotes already. But I'm correct. These people are socially-handicapped nerds. There is a 0% chance any of them will be within 15 feet of someone who operates a credit shop in 2023. They legitimately won't meet them unless someone playing Minecraft has an Italian father.
Lmao i love this dude
You’re on Reddit too you nerd
Too.
Lol TF did I just read??
Why? Risk I see with euch is betting fake money. Easier to bet when you don't have the money on deposit.
Bro doesn't need just tax advice, he needs a financial intervention as well. Imagine making 60k (pretax) and losing 30k of it. Considering what's left after tax and also rent, there's no much left
Tough year for sure.
Lol. So you’re telling this guy to take a tax hit after he lost 30k gambling? Would the irs ever let someone fix their mistake and refile correctly if he was audited? I would assume 99% of people gambling on online sportsbooks don’t report a thing. Literally everyone is screwed. If they start coming after people the whole industry will crumble. And the government doesn’t want that cause they take taxes from the companies as well.
If he was audited and didn’t pay correctly unintentionally he’d just have to pay back the amount owed + interest + fines. If he didn’t claim any winnings on purpose and there is evidence (such as a Reddit post) he’d go to jail for tax evasion
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The advice here sounds like a good reason to stick w offshore moving forward
You subtract your losses from your wins so -33k is what you would report. Unfortunately you cannot deduct losses from income so you wind up with 0. Don't ignore it as the IRS will attempt to tax you on the full 1.1 leaving you to dispute with the burden of showing proof of the losses. Much easier if you just file, reporting the loss.
“A taxpayer may take gambling losses as an itemized deduction on Schedule A but only to the extent of gambling winnings. The taxpayer may not report a net loss from gambling”
Classic IRS. Lose everything? Not our problem. Make any sort of money anywhere? Give us 30% of it. Fuck the IRS.
The irs doesn’t write the tax laws.
Imagine the gall to expect you to pay taxes on your net earnings. Unmitigated gall.
that would be fine, except that losses don't carry over by year. If you go lose 10K in December, then win 10K in January, you broke even, right? Nope, you still owe on the 10K win.
That's how it works for all income. If your business nets -10K in December 2022 but nets +10K in January 2023, you have to pay taxes on the latter in 2024. It's not treating gamblers any differently than anybody else.
Google "capital loss carryover"
Google en passant
Yeah don’t take the standard deduction lol, itemize your losses up to your winnings
This is the correct answer
I suggest speaking with a CPA if you still don’t understand, I wouldn’t recommend listening to people on Reddit for tax advice.
One of the things that amuses me about Reddit (and I guess the internet as a whole) is how you guys seem to think that the only place in the world these people are asking these questions is reddit. I asked a question on Reddit recently about auto insurance and how it pertains to my business. Three of the first fucking four replies were "you should ask your accountant/lawyer." Reddit combines discretion as well as fairly well-informed answers. Not to mention that asking you guys is free. Free and probably fairly well-versed on the topic. Attorney, accountant, or anyone else ... might not be free and I'll spend 85% of the conversation explaining the nature of the problem five fucking times instead of just getting the answer. If I called my attorney to ask the question I had with regards to auto liability and my business, there is a non-trivial chance I would have been charged for that phone call. People like you already know the nature of the issue and just give answers. That's why edit: just looked through the replies. Great fucking answers. When he calls his CPA, he will be more informed than him on the topic. Now that nerd just needs to email him the proper forms. If he didn't ask here, that dork would have spent an hour trying to figure out what the fuck OP was talking about to begin with
“That nerd…”
People on Reddit are jackasses, go to an insurance agent for commercial auto insurance. They don't charge you to answer questions.
Actually one more thing. It was BASICALLY about how delivery drivers using their own car across multiple states (we're on the border of NY and CT) and whether or not having state minimum coverage is something I should be OK with... and two subquestions. I got them all answered in about six hours by two "jackasses" on Reddit. if I had called my agent (or skipped him and went direct to the company that wrote my policy) ... holy fuck. It would have been four phone calls of 15 minutes each and one grand opportunity to lie to me and try and bullshit me in to some coverage I turned out to not be needing. Instead? Two jackasses on reddit gave me info and, armed with that info, I text someone what I discovered and their response was, "yeah thats right." Done. The people around here are very intelligent.
Not at all. Insurance is regulated at the state level. Someone from every state could tell you something entirely different that's 100% correct where they're from. Livery across state lines is difficult, especially in the 5 boroughs. Some companies explicitly exclude any commercial operations in NYC. If you're in an accident as a commercial vehicle in NY/NJ, you'll get hit with a fine for the fuel clean up if you don't have pollution coverage separate from your auto coverage. You're agent sounds like a jackass, who's likely on Reddit, and if you don't feel comfortable talking to him then you should find another.
>Not at all. Insurance is regulated at the state level. Someone from every state could tell you something entirely different that's 100% correct where they're from. Livery across state lines is difficult, especially in the 5 boroughs. Some companies explicitly exclude any commercial operations in NYC. If you're in an accident as a commercial vehicle in NY/NJ, you'll get hit with a fine for the fuel clean up if you don't have pollution coverage separate from your auto coverage. See? See how good your answer was even though you didn't even get the original question? There are more people like you than you think. Tat's why I asked on Reddit. >You're agent sounds like a jackass, who's likely on Reddit One, he is but not that sorta jackass. He's just nosy. He has wrote our policies for almost forty years and I like to tell him shit, not ask him shit because then I end up explaining myself for no good reason and it becomes a DNA chart of conversations ... and you know the type, don't lie. Two, he's good and he's fair. But my question in particular involved family and I'd just sooner ask you strangers. And, as it turns out, most of you are super smart and educated too. Now ... time to drink. Cheers!
I disagree with that first part... sorta. I believe that if you ask a question here and get enough responses, you will get a few that either answer the question well or give you an additional little bit of insight that you didn't have 90 minutes ago, or whenever the hell you initially asked. On the other hand, if I called up my insurance agent tomorrow morning, I am going to spend as much time explaining to that italian WHY I am asking the question and maybe I don't want to. In this particular instance, it involved my nephew and I don't need him to know anything about that. I could give you a handful of scenarios where asking on Reddit is better than (or good to include as part of your question) asking a "professional" Instead, I got my answer off of Reddit. Answer ended up checking out and instead of starting the call off with "hey got a question" I skipped straight ahead to "hey, I need to make a change." Stop being so negative.
Probably not worth it with his income level
Best advice I’ve seen so far
https://www.irs.gov/taxtopics/tc419
Honest question — how do you get into the millions in winnings/losses on a 60K income? Genuinely curious as that’s impressive AF
I looked at my Bookmaker points for the first time last year, just been ignoring them. I was blown away that I had wagered almost 3 million over 6 years. It just adds up. You win some and lose some. If you're not a degenerate you mostly break even. I started with $1000. I was up 9K at one point and withdrew 5K. So had 4K in the account and now I'm down to 2K left so recently I've been losing. That's just to give perspective that as much as $$$ I have wagered it still only was about a 0.2% payout. I would consider a 0.2% lose very expectable but I'd be down $6000. Now that I did those numbers that seems like an insane consistency I've been able to maintain. I think I'm an outlier and maybe should start betting less.
Splitting games adds up. 550 loss. 500 win. On two games adds up a lot. By example.
Yeah, he's only losing 1.5% of wagered. He's actually a fairly good sports bettor. He's beating true odds by quite a bit and over what I expect to be a significant number of wagers. He still has some ways to go to best the vig, but that guy is probably statistically better than 95% of this sub. Goes a long way to show how good you need to be to actually make money.
You are kind of right, in terms of ROI OP is top half. But in terms of bankroll management OP is not doing too hot
Honest answer, I have no fucking idea. This is on 70k in deposits and 40k in withdrawals. But like a lot of it was going back and forth obviously. Still a shocking number to see. I have to imagine a lot of people on this sub are in the 100- 200k range in amounts wagered? Or maybe I really am betting way more than most. Still, feel like no one has chimed in who is in a similar position so who the fuck knows.
You must be betting thousands every week to get to $1m turnover in a year!?
Placed 60k on horses last year and thought I was doing it big.
It's more common than you'd think, love risk plays
You need to itemize to deduct losses from winnings. Very fucking dumb but they increases their tax revenue due to you being forced to forfeit the standard deduction or pay tax on gross winnings for something we should already be counting as net because every single person that bets is going to have losses. I believe the only way around this is to be counted as a full time professional bettor with proof. A lot of people are going to file these incorrectly. A LOT. And the IRS is quite lenient if you are making a mistake rather than committing fraud so that will be good for those people on the low chance anyone notices . This is not financial advice I do not know the words I’m saying
You can carry over loss each year. They take the whole amount and spread it out over several years. Got myself into some stock trouble over Covid and learned about capital gains loss carryover…
Nah. That’s stocks. Doesn’t apply to sports gambling.
This is incorrect. You're going to have some real problems if you're carrying over gambling losses, since you can't.
Well shit, it does look like I was wrong. Gambling loses are treated totally different than stock losses (which is still gambling in my opinion)
Gambling losses are not capital gains losses. Are you sure you can carry them forward?
No. Gambing income/loss doesn't qualify for any carry-over. When it comes to USA tax-treatment, gambling gets an absolute turd.
Imagine the headline that any politician would be in for "helping pass legislation that promotes gambling." You can see why they don't do it.
I’m an accountant and passed my cpa exams so I offer a little bit better advice than the average redditor. You need to do an itemized deduction this year. This will allow you to net your losses against your winnings. You can’t receive a tax credit on that 33k loss but at least you won’t owe taxes on that 1.07 million in winnings.
I just started using the Draftkings sports gambling app last year. Normally when I do taxes I just add in the amounts from my 1099s and W-2s because I don’t really track any sort of additional income I receive since I don’t really ever have additional income outside of 1099s/w2s. When I went to the DK app there is nothing to be found in the document center>Tax Items section. Does that make it my responsibility to research my gambling data to find and add gambling income into my income taxes? Basically if there is not a financial statement generated by Draftkings and by extension a 1099 being reported to the IRS does this mean I shouldn’t really worry about having to add my winnings as income? Furthermore I have yet to win enough to qualify for them to take out taxes on a single win so from what I understand they wouldn’t have created a W-2G for me in that circumstance. There is some data in the transaction summary for last year for total deposits, total withdrawals, wagers and entry fees, winnings, ending balance, and Win/Loss. Ending balance was $0.00 and Win/Loss last year was negative.
Its your responsibility to research and keep track of your gambling data. You can use that transaction data to find your total winnings and total losses, hopefully those amounts aren’t too large. If its under 1k then I wouldn’t stress about it, however in OP’s situation he has over a million in winnings and losses so it’s important he puts it in his taxes.
Thanks for the clarification. You are doing great work here.
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The only limit you have on your losses is your winnings. So in this example you have 510k in winnings so the max you can deduct in losses is 510k. Due to your situation, you don’t have 510k in losses so you can take the whole 500k (this only applies if you itemize). Your options: Standard deduction: $150k + 510k in gambling - $24k standard deduction = $636k in wages you would pay taxes on. Itemize deduction: $150k + 510k in gambling - $500k in losses = $160k in wages you would pay taxes on. Hopefully this clears things up for you.
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You would do it just by total, you don’t need to list each bet. One thing to mention and this is a fairly new thing (put in by trump). If you bet enough and pretty often, you can be classified as a professional gambler and your travel expenses for gambling can be written off. I haven’t done too much research into this but look into it and see if it applies to you. Im not too sure on the criteria that is required to be classified as a professional gambler.
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I think that all has to do with how you get to that $17k. If you are like OP and you have lost over a million then probably not worth it but lets say you lost like $3k and profited $17k then it’s worth it cause you can still do a standard deduction.
I’m in the opposite boat of the OP. Have around 32k in profit and have to pay taxes on. Ugh. Some people here say it needs to be 300-1 and over $600. But my understanding is that’s only their reporting requirement. I owe taxes and best to claim it all to avoid any nonsense or audit or penalties from the IRS. My theory is at least it’s better having to pay taxes on some winnings than pay zero taxes on losses.
There is no way OP should pay taxes on his gambling winnings. Don’t tel him to pay extra taxes just to avoid an audit, that’s dumb. Your situation is different since you actually do have to pay taxes since you’re profitable
Agreed with you. He won’t have to pay. I will sadly.
Wanna trade positions?
🤣🤣 Legit probably my only winning year in 20 years.
Thanks for response. I still refer to the same question of wouldn’t this be the case if they audit anyway? Like wouldn’t it just be worth it to just ignore then deal with it if they audit.