Originally Posted by
mem5757
yes this is true, so even if you "offset" your winnings with losses you could still pay more in taxes since you have to forfeit the standard deduction if you itemize.
lets use an example: single guy has 60k worth of taxable income from his job. he uses the standard deduction of 12k, now he has 48k worth of taxable income for that year.
next year the same guy still has 60k in taxable income from his job, but now he has 20k worth of W2s from Fanduel. He itemizes and offsets them with 20k worth of losses from DraftKings, but since he itemizes he forfeits the standard deduction, so now his taxable income is still 60k, instead of the 48k that he was taxed on the previous year.
So point is you want to try to avoid triggering W2s and 1099 forms whenever possible, because even if you offset them you still pay more in taxes since you are forfeiting the standard deduction and with gambling losses you are only allowed to deduct up to your winnings, unlike stocks where you can also deduct losses.