If you are going to try to make $ via prediction markets, consult an actual licensed tax preparer, cpa, or financial advisor.
You will likely have to set up a business of some sort (flat filing fee in most states in the hundreds of dollars range) in order to properly net out your costs against your winnings. The 2016 tax law changed the rules about hobby and gambling income to no longer allow you to deduct your costs, unless you itemize, which means unless you were already close to itemizing you end up paying 15% of your gross winnings, not of your net.
If you are going to try to make $ via prediction markets, consult an actual licensed tax preparer, cpa, or financial advisor. You will likely have to set up a business of some sort (flat filing fee in most states in the hundreds of dollars range) in order to properly net out your costs against your winnings. The 2016 tax law changed the rules about hobby and gambling income to no longer allow you to deduct your costs, unless you itemize, which means unless you were already close to itemizing you end up paying 15% of your gross winnings, not of your net.