Twitch Taxes: How to File a 1099 If You Made Money Streaming

The Internet, social media, and smartphones have changed how the public consumes news and entertainment. Live streaming, the direct, real-time transmission of audio and video by content creators to followers and fans, has helped usher in this new era. Twitch (owned by Amazon) is one of the most popular live-streaming platforms, perhaps only rivaled by YouTube. It has made a handful of streamers into millionaires while giving many more an excellent way to make a living.

While Twitch streamers tend to be younger and start their careers as hobbyists, they now have tax responsibilities that they cannot ignore. The Internal Revenue Service (IRS) doesn't make allowances or exceptions for age or a lack of understanding regarding tax duties. So, if streaming has become a viable source of income, it's imperative to take the process seriously.

Use this article to learn how to address your Twitch streaming income from a tax standpoint. Key takeaways include: 

• How to pay taxes on Twitch earnings and other considerations 

• The forms you'll need to file in support of your Twitch taxes 

• When and how to file your federal tax return 

Paying Taxes on Twitch Earnings

Twitch streamers are considered self-employed individuals. Twitch does not classify streamers as employees or in a legal partnership with the platform. Because of this status, you will have more tax responsibilities than a traditional W-2 employee, but you'll also have additional opportunities to minimize your tax liability.

Participating in an online tax interview with the platform is essential to lowering your tax liability. According to Twitch, "U.S. tax interviews collect the tax identity information in the form of a W-9 or W-8BEN form for all providers. This process determines whether U.S. withholding tax is applicable to your payment. If you do not complete the interview, a default withholding tax of up to 30% may apply to your payments.

"Twitch recommends having your Social Security Number (SSN), bank account, and any available tax information ready prior to the interview.

Hobby vs. Profession

Most people start Twitch streaming as a hobby to highlight and discuss their favorite video games, movies, and music, among other forms of entertainment. This means they're operating without the intention of making a profit. But what happens when your audience starts to build and you begin making money? When does your hobby become a business?

The IRS has established several factors to help you consider whether you're still a hobbyist or your Twitch activities have become a business. Factors you should consider include: 

• You carry out activities in a businesslike manner and maintain complete and accurate books and records.

• You put time and effort into the activity to show you intend to make it profitable.

• You depend on income from the activity for your livelihood.

• You have personal motives for the activity, such as general enjoyment or relaxation.

• You have enough income from other sources to fund the activity.

• Losses are due to circumstances beyond your control or are standard for the startup phase of their type of business.

• There has been a change in the methods of operation to improve profitability.

• You and your advisor have the knowledge to carry out the activity as a successful business.

• You were successful in making a profit in similar activities in the past.

• Your activity makes a profit in some years and how much profit it makes.

• You expect to profit from appreciating the assets used in the activity.

The IRS notes, "All factors, facts, and circumstances concerning the activity must be considered. No one factor is more important than another."

Deductible Expenses

Tax deductions can reduce the taxable income you generate from your Twitch earnings via write-offs. Maximizing the use of every available deduction will decrease your tax liability and keep more of your hard-earned money in your pocket.

There are standard tax deductions you can take advantage of in addition to deductions that are much narrower and applicable to your industry. A common deduction you can take advantage of is the home office deduction, which self-employed individuals can take. Your home office must be used exclusively and regularly as an office and must be your principal place of business to qualify.

You can calculate the home office deduction using a simplified option that takes less time or the regular method that requires you to calculate your actual office costs. If you use this method, here are some of the expenses to include: 

• Regular rent payments

• Mortgage interest payments

• Property taxes

• Utilities like heating, water, and electricity costs 

• Repairs in the office space or general housing maintenance 

• Home insurance premiums

• Depreciation

Add up the total costs to determine how much applies to your home office. For most expenses like heating, rent, mortgage interest, and insurance, the total cost is divided according to the size of your office in relation to your entire home. Establish what percentage of your home is taken up by your office and use that to divide these costs.

There are other expenses associated with streaming that can be deducted. These include: 

• Webcam and other camera equipment

• Microphones

• Cost of ads promoting your channel

• Specialized streaming software 

• High-speed internet fees 

Earning Thresholds

If you've made $400 or more annually from Twitch streaming, you must file an annual tax return and estimate and pay quarterly taxes.Because some Twitch streamers are minors, they must rely on a parent or guardian for filing assistance. We'll tell you more about that scenario in a moment. 

Individual vs. Entity

Unless you select a specific entity structure, the IRS will treat you and your business as a sole proprietorship for tax purposes. While operating as a sole proprietor doesn't require additional effort, it can present issues in the long term. Sole proprietorships provide you with no legal protection, meaning you will be personally liable for taxes, debts, lawsuits, and other unpleasantries.

That's why our CPAs typically recommend forming a limited liability company (LLC), which offers numerous advantages to small business entrepreneurs. LLC owners enjoy simplicity and flexibility in their tax filing and the protection of their personal assets, shielding them from business liabilities.

Filing as a Minor

It's likely that Twitch streamers who are minors are claimed as dependents by their parent or guardian on their tax returns. If you're a minor who has to file a tax return for your Twitch earnings, your parent or guardian must file on your behalf. Generally, your parent or guardian will file based on your gross income, including: 

• Earned. This includes any salaries, wages, tips, fees, and other pay you received with streaming for Twitch. 

• Unearned. This type of income applies to investments, interest, rent collection, and other income that likely doesn't apply to Twitch streaming. 

Twitch Taxes & Paperwork: What Forms Do Self-Employed Streamers Need?

If your Twitch account made $600 or more in payouts in tax year 2024 from streaming, you will receive IRS Form 1099-NEC, Nonemployee Compensation from Twitch by the end of January. If you received $5,000 or more during that same period from a payment processor such as PayPal, you will receive IRS Form 1099-K, Payment Card and Third Party Network Transactions. Contact Twitch support for assistance if you haven’t received forms detailing your Twitch income by then.

Use these and any other relevant Twitch 1099 tax forms as supporting documentation for your tax return. Forms you may use to file your taxes and claim tax deductions include: 

IRS Form 1040

Individual taxpayers file IRS Form 1040, U.S. Individual Income Tax Return. Form 1040 calculates your federal taxable income and tax liability. You should also file schedules to report your self-employed income: Form 1040 Schedules C and SE.

Form 1040, Schedule C

Unless you elect to form as a different business entity, Twitch streamers represent sole proprietors for federal income tax purposes. To report business income and business expenses, you should file IRS Schedule C (Form 1040), Profit or Loss from Business (Sole Proprietorship). Schedule C calculates your business income or loss from self-employment.

Form 1040, Schedule SE

You must also pay self-employment tax on your freelance income. Sole proprietors must calculate self-employment tax liability using IRS Schedule SE (Form 1040), Self-Employment Tax.

When & How Twitch Streamers Pay Income Tax

Self-employed individuals, including Twitch Streamers, must estimate and pay quarterly estimated taxes throughout the year. Quarterly estimated tax payment due dates for 2025 include the following: 

• April 15, 2025

• June 16, 2025

• September 15, 2025

• January 15, 2026

Form 1040, Schedule SE

Use IRS Form 1040-ES, Estimated Taxes for Individuals, to calculate and pay your quarterly estimated taxes. The form includes payment vouchers and instructions for filing online.

If you struggle to make accurate calculations by each deadline, our full-service quarterly estimated tax solution can help.

File Twitch Taxes Without a Hitch: Get Help From an Expert

Efficiently addressing the tax responsibilities associated with your Twitch revenue stream as you grow your Twitch channel can be a challenge. As your streaming business matures and grows, it will demand more of your time and energy, leaving fewer and fewer opportunities to address your complex financial work and minimize your tax liability. That's why many streamers and other professionals in new and emerging industries trust the tax professionals at 1-800Accountant, America’s leading virtual accounting firm, to address their financial work.

Whether you need personal income tax preparation, tax advisory from our tax advisors, or any of our professional accounting services, we have the affordable solutions you need to ensure your Twitch business continues moving upstream. Schedule a quick consultation–usually 30 minutes or less—to learn more.