Twitch Streamer Taxes in Illinois - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Twitch Streamer income taxable in Illinois?

Yes, absolutely. Income earned from Twitch streaming is considered self-employment income and is taxable at both the federal and Illinois state levels. The IRS treats Twitch streamers as independent contractors, not employees of Twitch. This means you're responsible for reporting your earnings and paying all applicable taxes.

Federal Requirements (Schedule C): You'll report your Twitch income and expenses on Schedule C, "Profit or Loss From Business (Sole Proprietorship)". This form is filed with your individual income tax return (Form 1040). Schedule C calculates your net profit (income minus expenses), which is then factored into your adjusted gross income (AGI).

Illinois Specific Rules: Illinois has a flat income tax rate of 4.95% for the 2024 tax year (filing in 2025). Your net profit from Schedule C will be added to your other income, and this total taxable income will be subject to the 4.95% Illinois income tax rate. Illinois also requires you to file Form IL-1040 to report your state income tax liability.

Top Tax Write-offs for Twitch Streamers

As a self-employed individual, you can significantly reduce your tax liability by claiming eligible business expenses. Here are some common deductions for Twitch streamers:

• Streaming Equipment: The cost of your computer, webcam, microphone, lighting, capture card, and other equipment used directly for streaming is deductible. You can either deduct the full cost in the year of purchase (using Section 179 deduction, subject to limitations) or depreciate the cost over several years.
• Software & Subscriptions: Expenses for streaming software (OBS Studio, Streamlabs Desktop), editing software (Adobe Premiere Pro, DaVinci Resolve), graphic design tools (Photoshop), music licenses (StreamBeats), and any subscriptions necessary for your stream (e.g., Twitch affiliate/partner fees) are deductible.
• Internet & Utilities: If you use a dedicated portion of your home exclusively and regularly for streaming, you may be able to deduct a portion of your home-related expenses, including internet, electricity, and rent/mortgage interest. This is calculated using Form 8829, Expenses for Business Use of Your Home. The rules for this deduction are complex, so careful record-keeping is essential.
• Mileage: If you travel for streaming-related activities (e.g., attending conventions, meeting with sponsors), you can deduct the business portion of your mileage. For 2024, the standard mileage rate is 67 cents per mile. Keep a detailed mileage log documenting dates, destinations, and business purpose.

The 15.3% Self-Employment Tax Surprise

Many self-employed individuals are surprised by self-employment tax. When you're an employee, your employer pays half of your Social Security and Medicare taxes. As a self-employed individual, you're responsible for both the employer and employee portions, totaling 15.3% (12.4% for Social Security and 2.9% for Medicare).

You'll calculate this tax on Schedule SE, "Self-Employment Tax". However, you only pay self-employment tax on 92.35% of your net earnings from Schedule C. The good news is that you can deduct one-half of your self-employment tax from your gross income on Form 1040, which helps reduce your overall tax liability.

Remember, self-employment tax applies to earnings over $400.

Closing Tip for Illinois Residents

Tax laws can be complex, and it's easy to miss deductions or make errors. I strongly recommend keeping meticulous records of all your income and expenses throughout the year. Consider using accounting software designed for freelancers or consulting with a qualified tax professional (like myself!) who understands the unique challenges faced by Twitch streamers in Illinois. Proactive tax planning can save you money and stress come tax season. Good luck with your streams, and happy filing!