Any income that is received through streaming is taxable in most nations. This article will reference U.S. laws, but most countries want a cut of their citizens’ money, so wherever you are, check with your local robbers state revenue service.
The reason is simple. You are essentially operating as a sole proprietor of your own business. That’s right, you’re a business owner. Congrats!
As a result, any money you pull in will be taxable. Just because the money received is classified by Twitch as a donation doesn’t mean you aren’t required to pay taxes on it.
What Should You Do?
1. Speak With a Professional
One of the best pieces of advice you will be able to get if you are looking to stream on Twitch would be to speak with a tax professional. You want to speak with someone who is a professional in the arena because they will be able to give you tailored advice for your situation. By speaking with someone with experience working with freelancers, you can get optimized advice that should give you the ability to calculate your real taxes owed.
2. Deductions
If you are planning on making any deductions from your Twitch setup, you will want to have a professional that you can bounce the potential deductions on. That way, they will be able to tell you what you could potentially deduct and how to deduct them. They will be able to give you the appropriate advice needed to ensure that you aren’t paying more than you have to. You maybe be able to deduct equipment like green screens or lighting.
3. Track Everything
When you are looking to figure out your taxes during tax season, you will be glad you took accurate records of everything. You want to track all of the money you pulled in from Twitch. That way, you will be able to look back on your financial year and figure out how much you owe. You want to track everything using software or using a spreadsheet. This will give you the ability to pay the appropriate amount of taxes when it comes due.
As you can see, streaming can be complicated. Because of this, you want to ensure you are speaking with a tax professional with experience in the area. Any money you pull in from Twitch will be classified as income. Therefore, you will be taxed on it. If you are unsure of how much to pay, speak with a professional tax accountant to ensure you are paying what you are required.
