2025 Tax Information

We need to preface this discussion of taxes by saying that we are not tax advisors, we are only providing this for informational purposes. This is our general understanding and may not apply to your situation and we may be wrong – every person should do their own research and use a competent tax advisor – we are not responsible for your reliance on the below.

Triumph is required to issue a 1099 to users who hit certain thresholds of withdrawals.

The following relates to tax year 2025 (transactions between 1/1/25 and 12/31/25) – the tax treatment will be better for 2026, for information about 2026 click here.

There may be two separate tax treatments for players related to their income and deductions in 2025: (i) hobby treatment; and (ii) business treatment (for more information on whether income is generated from a business or a hobby click here).

We assume most of our successful players engage in the platform as an eSports business with the intent to make a profit, however, the treatment is dependent on each player and will affect the taxes due.

For “hobby income” the IRS will apply taxes for the amount generated by the hobby – with respect to Triumph that is the amount of the 1099. Unfortunately, for tax years 2018-2025 the IRS disallows deductions of expenses associated with hobby income. Here, such deductions would be the amount of tournament entries (i.e. deposits) made. As a result, the 1099 amount would be reported as income on Schedule 1, line 8 of form 1040.

The entry fees are deductible from “business income”. Here a player would use Form 1040 Schedule C (“Profit or Loss from a Business”). The amount of the 1099 would be identified on line 1, with the costs and expenses of operating the business being identified in the rest of the schedule. For players operating as a business, the cost of tournament entries, i.e. total deposits, would be identified as a cost of the business, so if you received $700 but spent $600 entering tournaments your total income would be $100. For players operating as a business, be sure not to miss all the deductions that are available, a good overview of these for eSports players and streamers can be found here.