So you’ve been steaming big. You’ve got that shiny sub button, a strong following and maybe you even got yourself a few big donations. Life is good. But as we enter 2016 the IRS wants their cut. As a new streamer or even a veteran streamer there may be some things about your tax return that you did not know.
So what are these forms and what do they mean?
So chances are that if you have earned money streaming on Twitch you have received 1099-MISC or even a 1099-K. Not only are these forms sent to you but they are also furnished to the IRS so that they know how much you made during the year. Ultimately, this means that the IRS has a rough idea of how much tax you will owe. These 1099’s that you received, for the most part, represent your gross streaming receipts with a few exceptions. If you receive your money from subs and twitch ads through your PayPal, you may have your income double reported. It is important to keep track of all of the money that goes into your PayPal and bank accounts as you don’t want to be taxed on deposits that were not earned through streaming.
Donations – Common misconceptions
So you have received a 1099-MISC, but you may be wondering what the 1099-K is because you did not receive one. Payment processors, such as PayPal, must report the gross payments you received only if it was over $20,000 and over 200 separate transactions in a year. This does not mean you should not report how much you got from people donating to your stream. Even though you did not receive this form you still need to report this on your tax return.