January 31, 2024

35 Twitch Streamer Tax Write-offs (With Detailed Explanations)

Contents

If you made money on Twitch, there’s a good chance you’ll owe tax on those earnings. As unfortunate as that is, the good news is that you can potentially pay less tax by taking deductions or “write-offs” that will lower your tax bill.

In this article you’ll find common tax deductions for Twitch streamers. Use it to keep more of your Twitch earnings in your bank account.

Tax write-off basics - read this first!

Before taking deductions, there are some basic tax rules that you need to know. 

What is a tax write off?

A tax deduction, often called a “write-off,” is an expense that a taxpayer reports on their tax return to lower their taxable income. By lowering their taxable income, they pay less tax. 

As a Twitch streamer, your taxable income is the total money you earned from streaming. This includes your Twitch payouts and income from other sources such as merch, donations, and others. 

The IRS allows you to deduct, or “write-off,” the expenses necessary to grow and entertain your audience. These deductions reduce your taxable income, which means you pay less tax.

Filing & paying taxes as a Twitch streamer

To report your Twitch income and take write offs you need to file a tax return. Most streamers will file Form 1040 and report their business income and expenses on Schedule C.

Twitch will provide you with one or more Forms 1099. This form reports your Twitch earnings for the prior year. The IRS also gets a copy. You’ll use the 1099s, in addition to other tax forms, to report income from Twitch streaming on your tax return. 

Twitch won’t have any record of your deductible expenses so you’ll need to track those separately. Referencing a spreadsheet, expense tracking software, or bank statements, you’ll input your deductions into your tax return.

Have questions? Refer to our Twitch Form 1099 walkthrough for a deep dive on the tax filing process for Twitch streamers.

Self-Employed vs Hobby Income

Not all Twitch streamers can take deductions. 

The IRS limits deductions to streamers who are “self-employed.” If you stream for fun, without any intention of someday streaming full-time or even part-time, then you’re earning “hobby” income according to the IRS.

Self-employed streamers report their earnings on Schedule C and take deductions against those earnings to calculate their net business income. Hobby streamers report their earnings on Schedule 1 but no deductions are taken on this form. 

The hobby streamer classification is subjective. Although the IRS provides guidelines, you must make a determination based on your intentions for streaming. 

Are you living off your Twitch earnings? Do you hope to stream as a full-time career at some point? Be sure to have facts and rationale that support your decision in the event that the IRS audits your tax return.

Which Twitch streaming expenses are deductible?

As the owner of a streaming business, you might incur expenses in an effort to cultivate your audience.

The IRS allows you to take a deduction for any expense that is “ordinary” and “necessary” to your streaming business. This means you can’t deduct something that’s used personally outside of your streaming business.

For example, you can’t deduct your Netflix subscription. Netflix is likely not an essential component of your streaming nor is it one commonly incurred by other streamers. The exception, of course, would be that watching Netflix is integral to your streaming income.

Be reasonable and ethical when taking deductions. The fact that an item appears in your stream doesn’t automatically make it deductible. Think about the item’s primary use: for personal benefit or to benefit your streaming?

If something seems off on your tax return, the IRS can audit your deductions. Never take a deduction without the ability to support it during an audit.

Top tax write-offs for Twitch streamers

Here’s a list of deductions you might be eligible to take as a Twitch streamer.

Apps & software

Software directly related to live streaming or producing videos would typically be deductible, assuming it’s dedicated 100% to your streaming business. This might include sound or video editing software. It might also include the software you use while streaming live.

Other software might be less directly related to streaming, such as a Google Workspace subscription. To the extent that you use this subscription to support your streaming activities, the cost of this software would also be deductible. 

  • Broadcasting (StreamLabs, OBS Studio, XSplit, etc.)
  • Video editing (DaVinci Resolve, Adobe Premiere Pro, Camtasia, etc.)
  • Audio mixing (Adobe Audition, MixPad, Serato DJ Pro, etc.)
  • Productivity Apps (Trello, Microsoft Office, Google Workspace, etc.)
  • Other (OWN3D Pro, StreamFX, etc.)

Merchandise for resale

If you sell merch, you can deduct the cost of the merch. Deductible merch costs include:

  • Printing costs (Printify, Printful, Spreadshirt, RedBubble etc.)
  • Shipping and postage (USPS, FedEx, Shippo, Stamps.com, etc.)
  • Third-party fulfillment (ShipHero, ShipBob, ShipMonk, etc.)
  • Online marketplace fees (Shopify, Amazon, StreamElements etc.)

You can’t deduct merchandise you purchased from other streamers. Of course, there are exceptions, but this type of purchase would typically be personal and therefore non-deductible.

Contractors

You might outsource aspects of your streaming business to contractors. If so, payments to individuals performing services are deductible. Contractors you might have hired include:

  • Designers
  • Editors
  • Moderators
  • Virtual assistants

Be aware that you might need to file a 1099-NEC if you paid a contractor $600 or more by check, ACH, or wire (excluding credit card payments). Some platforms, such as UpWork and Fiverr, make the filing for you.

Marketing costs

Marketing costs include payments for software and supplies that promote your online brand. These costs are deductible and include things like:

  • Website domain registration and hosting
  • Ads
  • Stock photos and videos
  • Icons
  • Logos

Commissions & fees

Payments to affiliates and other collaborators for services are deductible. This includes payments to non-employees for appearances, participation, or promotion in an effort to build your brand. You may also pay for the right to use certain intellectual property, such as music or art, in which case the royalty payment is deductible.

Giveaways

You might use giveaways to increase your subscriber count. The cost of items given away are a deductible sales expense since these items are an investment in growing your audience.

Be careful to only do giveaways for people who have already subscribed. The IRS could, in theory, consider giveaways to non-subscribers to be actual gifts, not a promotional expense. Giving gifts might necessitate the filing of an annual gift tax return, if the value of your gifts is substantial.

Stream backdrop

You can deduct expenses related to cultivating your ambience. You might be trying to create a specific aesthetic for your streaming audience. Expenses incurred to curate your vibe can be deducted. 

Use your judgment though. The fact that something appears on camera while streaming isn’t sufficient grounds to deduct it on your tax return.

  • Royalty-free music
  • LEDs, neons, blacklights, etc.
  • Candles, diffusers, incense, etc.
  • Posters, tapestries, wall art, etc.

Games & in-game purchases

Deducting games and in-game purchases probably seems too good to be true. In most cases it probably is, so you should only deduct these purchases to the extent they are related to your streaming. You may need to reduce the deductible amount if you played the game while not streaming.

  • Game purchases (Steam, Epic Games Store, Origin, Battle.net)
  • In-game purchases (subscriptions, consumables, upgrades, battle passes, etc.)

Legal & professional fees

You might pay someone to do your personal taxes, advise you on legal matters, or advise you on how to grow an audience. These expenses are deductible to the extent they are streaming-related.

  • Accountants (bookkeepers, tax preparers, financial advisors, etc.)
  • Lawyers & legal fees (entity formation, intellectual property, etc.)
  • Consultants (branding, coaches, technical, etc.)

Office supplies

You probably buy random things for your stream studio. These purchases would be deductible to the extent–you guessed it–that you use in your stream studio.

  • Cleaning supplies (disinfectant, wipes, fragrances, etc.)
  • Computer accessories (cables, hard drives, switches, etc.)
  • Reference materials (how-to-books, guides, tutorials, etc.)

Processing fees

Payment processors such as Stripe, PayPal, Cash App, etc. might charge you a fee to receive payments. As annoying as those fees are, they’re at least deductible.

These platforms may have also sent you a Form 1099-K. This form reports the “gross” amount you received through their platform before they took out their processing fees. 

In other words, the 1099-K shows how much you received, not how much you were paid out, so if you’re reporting the 1099-K amount on your tax return you’ll want to also deduct the processing fees to avoid paying too much tax.

Bank charges

Your bank might charge you fees for various transactions. These fees are deductible if they’re associated with a business account or if they’re specific to a business transaction, such as a wire fee.

Professional development

Whether it’s to develop your content production skills or your business management skills, the costs of developing the skills necessary to be a professional streamer are deductible. These costs might include:

  • Courses
  • Online communities 
  • Books & audiobooks
  • Professional association dues

However, professional development doesn’t include things like tuition or school supplies. To be deductible, an expense can’t qualify you for a new line of work. The training must improve skills related to your current work as a professional streamer.

Health insurance

As a “self-employed” streamer, you may have the privilege of taking the Self-Employed Health Insurance (“SEHI”) deduction. This deduction allows you to write off the cost of health insurance premiums under certain conditions, even though they aren’t strictly business expenses. Other health expenses, such as prescription meds, aren’t deductible (unless you itemize your deductions).

Business insurance

Insurance is deductible as long as it’s business related. Policies you might have as a streamer include:

  • General liability insurance
  • Commercial property coverage
  • Cybersecurity coverage

Insurance that covers your streaming studio is deductible through the home office deduction (see next section).

Home office

If you stream from home, you can deduct expenses related to your stream studio.

To qualify, your studio must be “regularly” and “exclusively” used for streaming. You can’t take the deduction if you occasionally stream from your bedroom and a few other places in your home. Your studio must be a distinct area of your home in which you consistently stream. It can’t be used for anything other than streaming.

The home office deduction has two sub-categories: 

  1. Indirect expenses
  2. Direct expenses

Indirect expenses are costs that apply to your entire home. Direct expenses apply only to your stream studio. Indirect expenses are deductible in proportion to your studio’s area to the area of your entire home or apartment.

For example, if your streaming studio is 100 square feet and your apartment is 1,000 square feet, then you can only deduct 10% of an expense that qualifies as an indirect expense.

You must actually pay the expenses in order to deduct them. If you split rent or mortgage payments with someone else, for example, you can’t take the deduction for their portion of the payment.

For a deeper dive into this deduction, including additional deductible expenses and a simplified calculation for this deduction, check out our other article: A Streamer’s Guide to the Home Office Deduction.

Rent

Your rent payment is partially deductible if you stream from home. As an indirect expense, rent is deductible to the extent your streaming studio occupies your entire home. Of course, if you rent a space 100% dedicated to streaming then you could deduct the entire cost of that space.

Mortgage interest

Mortgage interest paid on the home from which you stream is partially deductible as a business expense. At the end of the year, you’ll receive Form 1098 showing you the amount of mortgage interest you paid. 

Whatever amount you can’t deduct as a business expense, you can potentially deduct on Schedule A as an itemized deduction. This would be the “personal” amount or the amount not related to your streaming studio.

Real estate taxes

Real estate taxes that you pay for your home are partially deductible. These include taxes paid to a locality or county based on the value of your home. You can deduct prepayments of next year’s taxes as long as the tax bill was assessed before the end of the year. 

Similar to home mortgage interest, you can potentially deduct the remaining amount of real estate taxes on Schedule A as an itemized deduction.

Home or renter’s Insurance

You can deduct a portion of the homeowner’s or renter’s insurance premiums. You might pay these monthly or pay an annual amount. Both payments would be deductible in the year that you pay them. 

Repairs & maintenance

Costs to repair your home are includable in the home office deduction. You need to differentiate repairs & maintenance that apply to the entire home from those that apply to the home office only. Structural repairs to your entire home are only partially deductible as indirect expenses whereas repairs specific to your streaming studio are fully deductible.

Utilities

Unless your stream studio has its own utility accounts, costs to pay for water, electricity, and other utilities are partially deductible as indirect expenses. 

Mixed-use expenses

Some expenses–such as your cell phone or home internet bill–provide both a personal and business benefit. These expenses are called “mixed use” expenses. 

You can deduct mixed use expenses to the extent that they benefit your streaming business. This means that only a portion of the cost is deductible. The rest, which represents your personal use, is not deductible.

For example, suppose you use a gaming console both while you’re streaming and while you’re not streaming. Since personal expenses aren’t deductible, you can’t deduct the full cost of the console. When calculating your deduction for the console, you’d need to subtract your personal use of the console from the full cost.

How exactly do you do this?

Well, you’ll never know the exact amount of your personal use. But at the very least you should use a reasonable, systematic method to estimate your personal use.

A reasonable method can take many forms. But it often involves dividing the amount of hours you used the underlying item or service for business by the total time that it was used. You’re effectively calculating your business use as a percentage of the total use. 

You can use whatever units of measurement make sense for the expense. This could be time, space, or whatever else adequately represents how the expense was utilized. The bottom line is that when you use something personally, it becomes only partially deductible.

Home internet

As a streamer, a portion of your home internet subscription is almost certainly deductible. To figure the deductible portion, first calculate how much of your subscription was used for streaming (probably a lot of it). Apply this percentage to the total cost of your home internet subscription throughout the year. 

Cell phone

Your cell phone bill is deductible if you use it for streaming. Unless you have a cell phone dedicated solely to your streaming business, to deduct your cell phone bill you’ll need to determine the extent to which you used your cell phone for business versus personal reasons.

Credit card interest

You can deduct credit card interest that you paid - but only the amount that accrued on business-related purchases. Assuming purchases were made on your personal credit card, you’ll need to calculate the business and personal interest when taking this deduction.

You don’t need to worry about this calculation if your credit card is used exclusively for business purposes. You can deduct all of the credit card interest you paid during the year.

Furniture & hardware

At some point, you’ll probably buy furniture and other equipment for your streaming studio. In the business world these types of items are called “fixed assets.” They’re fixed because you’ll likely use them for a period of time greater than one year.

Because you’ll use these assets for more than one year, the IRS considers them to be “depreciable” property. Depreciable means that you must deduct the cost of these assets over the course of their useful life.

However, as is common in the tax world, there are exceptions to this rule.

Safe Harbor Depreciation Rules

The first exception is that you can deduct any asset that costs less than $2,500 in the year that you purchased it. For example, if your gaming PC cost $2,000 then you wouldn’t need to depreciate it. Additionally, if you paid $5,000 total to furnish your studio, you could deduct any specific item that cost less than $2,500. 

Section 179 Depreciation

As another exception, even if your gaming PC cost more than $2,500, you might be able to fully deduct it in the year that you purchased it. The purchase must qualify for “Section 179” depreciation. It will generally qualify if you purchase the PC for your streaming business.

Additionally, to qualify for Section 179 depreciation, the item must be used more than 50% for business purposes. Similar to other mixed-use deductions (see above), if you use furniture or equipment personally, then you’ll need to subtract from the cost an amount that represents your personal use of the item.

Bonus Depreciation

Lastly, you might have converted some property (such as furniture and consoles) from personal use to business use when you began your streaming career. Within limits, you might be able to deduct a portion of the cost of that property by taking advantage of temporary bonus depreciation rules.

Examples of deductible furniture & hardware that you might be able to deduct as a streamer include:

Computer & gaming systems

  • Gaming PC
  • Parts
  • Keyboards
  • Mouses
  • Console systems
  • Repairs & maintenance

Studio furniture

  • Desk
  • Chair
  • Risers
  • Stands

Recording equipment

  • Camera
  • Microphone
  • Arms

Licenses and permits

Your city, town, or county may require you to obtain a business license and/or home office permit for your home streaming studio. The cost of this license is deductible.

You might also need to register your business with your resident state’s Secretary of State. The registration fees are also deductible.

Meals

The cost of business meals, including taxes and tips, is deductible. You or an employee must be present at the meal for the meal to be deductible. The meal must also not be “lavish” or “extravagant.” Types of business meals you can deduct include:

  • Meals eaten while traveling for business;
  • Meals eaten at a convention;
  • Meals eaten while meeting with business “associates.”

The tax code imposes strict recordkeeping requirements for business meals. For each meal, you should have a receipt or other document showing where you ate, when you ate, how much you paid, who attended, and what business topics were discussed.

Typically, only 50% of your business-related meal expenses are deductible. If the meals are accompanied by entertainment, the entertainment portion is not deductible. The cost of traveling to and from the meal is generally deductible.

Personal vehicle

You can deduct your car, truck, van or other vehicle if you drive it for business. If you stream mostly from home, this deduction will be uncommon. But there may be times when you drive across town to stream from another person’s house. In that case, and others like it, the cost of the trip would be deductible.

The deductible amount depends on the extent to which you used your vehicle for business throughout the year. You can calculate your deduction using one of two methods:

  1. Standard mileage rate
  2. Actual expenses

The standard mileage rate is set annually by the IRS and varies year-to-year. Using this method, you multiply the standard mileage rate by the amount of miles you drove the vehicle in your streaming business.

The actual method entails tracking what you actually spent on your car and deducting the business portion of the costs. You calculate the business portion by dividing your business mileage by the vehicle’s total mileage. You then multiply the percentage by the sum of actual expenses, including costs for:

  • Fuel
  • Depreciation
  • Auto insurance
  • Auto loan interest
  • License and registration
  • Vehicle repairs & maintenance

Regardless of the method you use, you need to keep good records. This includes logging your trips in a spreadsheet, app, or other system at the time of the trip. For each trip, you need to document the date, origin, destination, mileage, and business purpose.

Travel expenses

Travel expenses are deductible to the extent they’re related to your streaming business. Here are a few scenarios illustrating this concept:

  1. Trip is 100% business related - Your travel costs are entirely deductible.
  2. Trip is mostly business related - Travel costs to and from the destination are deductible but costs related to personal enjoyment are not deductible (e.g. tickets to shows, side trips, etc.)
  3. Trip is mostly for personal enjoyment - Your travel costs aren’t deductible but you can deduct costs directly associated with your business meetings (e.g. meals, meeting rooms, etc.)

To provide a travel deduction, the trip must be to a destination that is outside the geographic area in which you live. The duration of the trip must be long enough to require you to sleep or rest while traveling. 

If your trip meets these qualifications then you can deduct the full cost of travel, including transportation, lodging, meals, and incidentals.

Short trips, such as driving across town to stream at your friend’s house, can also provide for a deduction. The trips don’t qualify as business travel so you can only deduct the transportation cost. In other words, eating at a restaurant near your friend’s house wouldn’t be deductible.

Refer to IRS Publication 463 for more information on travel and meals deductions.

Transportation

Transportation costs incurred while traveling for business are deductible. Transportation costs are a broad category, but generally include any cost necessary to get you from home to your destination and back again. Examples include:

  • Tolls
  • Parking
  • Rental car fuel
  • Taxis, shuttles, & trains

You can also deduct the costs of driving to a destination in a vehicle that you own. Refer to the “Personal vehicle” section above.

Hotels & lodging

The costs of hotels, motels, AirBnBs, seaside inns and other lodging are deductible if you’re traveling for business.

Lodging deductions have unique documentation requirements. Unlike other deductions, where documentation is required if the deduction is greater than $75, the IRS requires you to have a detailed receipt for all lodging expenses regardless of amount. 

Your lodging documentation must show, at a minimum, the following:

  • The name of the hotel
  • Where the hotel is located
  • The dates of your stay
  • Charges for meals, room, and incidentals listed separately

Travel meals

You can deduct the cost of meals eaten while traveling away from your home for business. 

Your business travel must be far enough from home such that it’s necessary to stop for sleep or rest. In other words, driving across town for something business related doesn’t allow you to deduct the meal you ate while out (unless it was for a business meeting).

Also, keep in mind that only 50% of a meal cost is deductible. This means that if you paid $20 for a sandwich, you’ll only get a deduction for $10 of the cost.

Conferences & webinars

The costs of attending conferences (whether live and in-person or pre-recorded and virtual) are deductible. You can also potentially deduct travel expenses related to the conference.

Retirement plan contributions

Contributing to a retirement plan provides numerous tax benefits. Your contributions are deductible. Investments within the account grow tax-free until you withdraw them in retirement, at which point they’re taxable.

If you’re contributing to a “Roth” account the opposite is true. The contributions aren’t deductible but the investment earnings can be withdrawn tax-free during retirement.

As a self-employed streamer, any of the following retirement accounts:

  1. Traditional or Roth IRA
  2. SEP IRA
  3. Solo 401(k)

The SEP IRA and Solo 401(k) are unique to business owners. They can provide for higher contribution limits depending on how much you earned from streaming. Check out IRS Publication 560 for more info.

Non-deductible expenses - what Twitch streamers can’t write off

Not all expenses are deductible, even if they’re related to your streaming business. Here’s a list of non-deductible business expenses:

  • Entertainment
  • Fines & penalties
  • 50% of business meals
  • Political contributions

Some expenses paid by your business are deductible but not by your business. You need to deduct these on Schedule A of your personal tax return as “Itemized Deductions.” These expenses include:

  • Medical expenses (except for health insurance premiums
  • Contributions to charity
  • Losses due to theft

Of course, it’s worth repeating that personal expenses generally aren’t deductible unless explicitly provided for by law. The line between personal and business is often fuzzy so be sure you can support any deduction with proper documentation and rationale.

Tracking your tax write-offs

Come tax time, you’ll input tax write-offs directly into your tax return from wherever it is you’re tracking expenses. 

If you’re not organized, you might find yourself in the unfortunate position of digging through bank statements trying to remember which expenses were personal and which were business. You’ll wind up confused, mad, and stressed. 

The better strategy is to spend a few minutes weekly or monthly documenting your expenses in a ledger of some kind. A spreadsheet will suffice, but if you’d like to get fancy, you could build a simple Notion or Airtable database where you can also attach receipts to each transaction.

Receipts are important to save. If you’re ever audited, the IRS will request documentation to substantiate the deductions taken on your tax return. Having your receipts in one place will ensure that your deductions will be sustained in the event of an audit.

What to do next?

Use this list as an inspirational reference guide, not as a source of truth. You know your streaming business better than anyone else knows it. You’re ultimately responsible for what goes into your tax return. Therefore, use your judgment and be ethical when taking deductions.

Also consider working with an experienced tax professional. A good tax preparer can keep your deductions IRS compliant and also advise you on other tax matters. If you’re making a sizable amount from Twitch streaming, there’s probably some money you’re leaving on the table when it comes to taxes.

This content is for informational purposes only and does not constitute legal, business, or tax advice. You should consult your own attorney, business advisor, or tax advisor regarding matters mentioned in this post. We take no responsibility for actions taken based on the information provided.

Get your free custom quote.

It takes less than a minute to start.

Made in Virginia