How do I report winnings from playing fantasy sports games?

Q: How do I report winnings from playing fantasy sports games, and are the expenses deductible? --John

The following answer was provided by William Colangeli, CPA, O'Malley & Colangeli, CPAs, PC.

A: The income is reported as 'other income' on page one of form 1040. There are two ways the expenses would be deducted. If the winnings are considered 'gambling' winnings, then the expenses are deducted on Schedule A and are not subject to the 2% limitation. If the winnings are not considered from gambling activities, then the expenses are deducted on Schedule A subject to the 2% limitation. Of course, Schedule A is filed is you itemized, so if you don't itemize, you get no break for the expenses. Just as FYI, if you were in the 'business' of playing these fantasy sports game, the reporting would be done on Schedule C. Check out the IRS web site for more info on some of the issues and terms used referenced above, its irs.gov. Whether your winnings are from gambling or not depends on the facts and circumstances of your situation.