FanDuel and DraftKings 1099-MISC Delays!
Today I’m writing about the delay in 1099 issuance from FanDuel and DraftKings and what you need to do. I said it numerous times on RotoGrinders- DON’T PANIC AND FILE YOUR RETURN YET! Reason I say this is the sites will issue a 1099-MISC to both you and the IRS. The IRS is looking for the 1099-MISC amount you reported to match. And if they don’t? You will likely receive a notice if the amount reported is less than the 1099.
I as a player and tax practitioner am LIVID this delay happened. This shortens my filing season and puts pressure on many a Grinder. I even saw people posting they just had to get their returns done because they or their children needed to fill out a FAFSA form, expecting a much needed refund, etc. And so you may have already filed. Here’s the thing, not all is lost. You can file what is called a 1040-X and related State Tax forms to correct your DFS related income. I’m sensing some will not even realize they are due a 1099-MISC as well. Again, that’s why the 1040-X is there.
The 1040-X is not a particularly easy form to fill out and it requires a line by line explanation as to why your return needed to be corrected. It could also get interesting if you or I find your activities constitute a business rather than a hobby. Ok, so you get your 1099-MISC and I or your tax practitioner is slammed running against the April 15th deadline. You think all is lost there, right? WRONG! I can file a Form 4868, Application for Automatic Extension making the new return filing due date of October 15th. You still have to pay any taxes due on April 15th, but we can make a payment with the Extension. At least if the Extension is filed, late filing penalties are eliminated.
Despite all that went down with 1099s, don’t feel like you are under more pressure yourself. Yes, you would like your refund sooner than later. But getting your return right is more important. Also, we have options to keep potential interest and penalties to a minimum or zero. I can discuss many options with you if needed. Contact me for a consult or tax preparation.
Patrick Guinan, CPA