⏳File 2023 taxes and minimize IRS late fees now!
Home › Freelancer Profession Deductions › Twitch 1099
Need to file Twitch 1099 taxes?
Need to file Twitch 1099 taxes? Read This First!
Professional live streaming has become a mainstream career for many. Live streaming a tutorial to make a loaf of banana bread, playing in an online gaming event or taking a virtual hiking trip are all part of the work of a fast-growing global population of streamers. Platforms like YouTube and Twitch act as tools for these online creators, who are all part of the larger creator economy.
According to research, while YouTube's user demographic ranges from 18 to 65 years old, 75% of Twitch users are below the age of 35. So if you are a Twitch streamer, there's a good chance that you're younger than 35 years old.
Twitch streamers are also online creators who are treated as self-employed individuals if they choose to pursue it as a career. As a Twitch streamer, you’ll have to pay your Twitch 1099 taxes on your own, as opposed to employees who have taxes taken out of their paychecks. Seasoned self-employed individuals are probably well-versed in the IRS 1099 form, but as a streamer on the relatively new platform of Twitch, you might be new to the process for accounting for your Twitch income and filing taxes.
Key takeaways:
- Professional streamers have to prove to the IRS that their Twitch streaming is a business.
- Hobby streamers can mention their Twitch income on their 1040 tax form
- Several IRS conditions qualify streaming activities as a viable business.
Table of contents
Do I have to pay taxes on my Twitch income?
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.
How does Twitch pay streamers?
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.
If you didn't get a 1099 form from Amazon, it's probably because the company made a mistake and didn't send it to you, or it got lost.
To pay the right amount in tax and file your tax return correctly, you can instead check your bank account statements to calculate what you owe or use your Twitch checks from Amazon. This can be used to calculate annual or quarterly taxes.
How do Twitch 1099 Taxes work?
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.
Filing Twitch 1099 taxes as a hobby streamer
Filing Twitch 1099 taxes as a business
Taxes for professional Twitch streamers
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.
What’s FlyFin?
FlyFin caters to the tax needs of freelancers, gig workers, independent contractors and sole proprietors.
But anyone can file taxes through FlyFin! FlyFin tracks all your business expenses automatically using A.I. technology.
Then, our CPA team files a guaranteed 100% accurate tax return for you – to save you a couple thousand dollars and a ton of time on your taxes.
In addition, you can download the FlyFin app and have your taxes filed in less than fifteen minutes, saving time and money.
Expert tax CPAs ensure 100%-accurate tax filing
A.I. finds every tax deduction, eliminating 95% of your work
On average users save $3,700
Was this tip useful?
Yes
No