Need to file Twitch 1099 taxes? Read This First!

Yes, you are required to pay taxes on any income you made from Twitch. You can use an estimated payments calculator to help determine whether you have to make quarterly tax payments. Amazon, Twitch's parent company, handles all the payments made to streamers on the platform. Amazon sends both you and the IRS a Twitch 1099 form at the end of the tax year listing all the income you’ve earned during the year. You'll calculate and pay your taxes, and file your tax return, based on your Twitch 1099 form. You'll have to remember that failing to pay your Twitch taxes, or not including them in your tax return, will have negative consequences. You could be hit with some harsh IRS penalties and interest or even legal action for tax violations. Plus, defaulting on tax payments can impact your credit rating, which could make it tough to qualify for bank loans. To avoid penalties, you can automate your taxes with innovative tools like FlyFin A.I., which automatically tracks all your income and business expenses. FlyFin also reminds you of all the important tax deadlines, like quarterly tax payments deadlines.

You can receive Twitch payments in a variety of ways, depending on which option you chose on your account. The fastest way is through direct deposit into your bank account, but you can also choose PayPal or receiving a traditional check. The type of 1099 form Amazon will send to the IRS and to you is a 1099-NEC (Non-Employee Compensation), which reports the income you’ve earned from Twitch, if you've earned more than $600 during the year from Twitch. If you make less than $600, you don't need to pay income tax on it.

The IRS is a complex entity with a huge list of rules and regulations for different types of activities that generate income, including income from Twitch streaming. In this case, the IRS wants to know if you’re a hobby streamer or a professional. When filing your Twitch taxes, you will need to choose whether to file as a hobby streamer or a professional streamer who operates more as a business.

Professional Twitch streamers making a career out of streaming videos are taxed as self-employed individuals and have to pay the federal SECA (Self-Employment Contributions Act) tax of 15.3% on top of their income tax. To calculate your tax amount, you'll have to use the profit and loss form, aka Schedule C, and use your Twitch 1099 to confirm your earnings. Twitch users making a career out of streaming are required to use the 1040-SE form to file their self-employment taxes and the 1099-NEC they get from Amazon to know the income they need to pay taxes on. To find all their deductions and pay as little tax as possible, they can download the FlyFin app.