Money Minute on Taxes: Is the $$$ You Make from Streaming ‘Income?’
Streamers have quite a few ways to earn a living from their streams: subscriptions, tips, sponsorships, etc. Often, streaming is the first source of income many people have had that hasn’t come from an employer. Because of this, there are a lot of misconceptions floating around about what this income is and what it means.
I’ll start this off by saying that I’m not a tax expert. You should always consult a tax expert when it comes to your taxes in your country. A lot of what I’m going to talk about comes from a U.S. perspective. Things may be different outside the U.S. which is why it is so important to understand the self-employment laws in your country.
However, in an effort to be helpful, today I want to address a topic which I see discussed a lot on places like Reddit and other message boards: whether the money you make online is considered income, and if you have to pay taxes on it.
The short answer: most likely yes to both.
The longer, more complicated answer…
When you decide to make money from streaming, you’ve basically started a business. Essentially, you are self-employed, even if you only stream part-time. Whether you accept subscriptions through GameWisp, Twitch, or other platforms, you are earning money from a business that you own and operate. Congratulations, you’re now an entrepreneur!
Because the word donation is used so often to describe much of this income, there is an unfortunate misconception that these payments have some kind of tax exempt status and streamers do not have to think of the money as income. However, the reality is that in the U.S., at least, there are only a few types of very specific organizations that are tax exempt. Unless you fall into one of these categories, any money you make online is more than likely considered income.
Because you are earning income, at GameWisp, we will ask you to fill out a W-9 form if you make enough money in a single year and are in the US. At the beginning of the year, if you have reached the threshold, we will file and send you a 1099 form with the previous year’s income. If you are a non-US streamer, you will fill out a W-8BEN form that we keep on file as part of our complying with U.S. tax laws, but those forms are not reported to taxing authorities the same way 1099’s are. Here is a bit more info on W-9 and W-8BEN forms.
If this is all new to you, you have no idea where to start, and it seems scary, you aren’t alone. Once again, I very highly suggest that you find a tax expert to help you, but here are a few things to help you get started:
https://www.thebalance.com/how-to-file-self-employment-taxes-2386219
Taxes can be intimidating, but it’s an important step in the process of turning content creation into a legitimate source of revenue that can be relied upon to support your craft now and into the future. Be sure you know your responsibilities, so they don’t get in the way creating cool stuff.
