Fantasy sports leagues can yield hefty winnings if Lady Luck smiles on you. If you win big—or even not so big—you should know that you'll need to save a portion of that money for the Internal Revenue Service (IRS). What many don't realize, is that those fantasy sports net winnings are considered taxable income by the IRS. In some cases, depending on the amount of winnings, fantasy sports website organizers have a legal obligation to send both you and the IRS a Form 1099-MISC or 1099-K, depending on how you received the income. The 1099 tax forms report your winnings to the taxing authorities and also gives you notice of the amount you must report on your taxes.
Read on to learn more important information about how to file your taxes with fantasy sports league winnings.