Fantasy Football has grown to a $4B industry, is projected to reach $14.5B by 2020 Uncle Sam wants to make sure you know to send in their cut. Tax avoiders have brought fantasy football under new scrutiny. If you play fantasy football, you should know that both your expenses and your winnings can – and should – be reported to the IRS. In fact, if you earn at least $600, you should receive a 1099-MISC form on which to report your winnings… but your winnings might be taxable even if they don’t hit that amount, so you should be careful to keep track of and report all of the money you come into. You also should know that you can’t claim what’s netted after entry fees, you have to claim the winning as income and the entry fee as an expense. So for instance, if you won $500 and paid a $50 entry fee, it’s incorrect to claim just $450. You have to claim $500 as income and $50 as an expense.
If you’re confused about what a 1099-MISC form is and how it differs from a 1099-K, stay tuned for my next blog post! I’ll take you guys through the differences and similarities of the two documents. But bottom-line, ALL WINNINGS ARE TAXABLE.
Photo credit: Fantasy Sports Trade Association, Eilers Research and the Chicago Tribune.