Twitch Streamer Taxes in Kentucky - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Twitch Streamer income taxable in Kentucky?

Yes, absolutely. Income earned from Twitch streaming is considered self-employment income and is taxable at both the federal and Kentucky 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 used to determine your adjusted gross income (AGI) and ultimately, your income tax liability.

Kentucky Specific Rules: Kentucky has a flat income tax rate of 4.0% for the 2024 tax year (filing in 2025). Your net profit from Schedule C will be included in your Kentucky income tax calculation. Kentucky also allows for a standard deduction, which will reduce your taxable income. You'll file Form 740 to report your Kentucky income tax.

Top Tax Write-offs for Twitch Streamers

As a self-employed individual, you can significantly reduce your tax burden 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 specifically 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 can deduct a percentage of your home-related expenses, including internet, electricity, and rent/mortgage. This requires careful calculation using Form 8829, "Expenses for Business Use of Your Home."
• Mileage: If you travel for streaming-related activities (e.g., attending conventions, meeting with sponsors), you can deduct mileage at the 2024 federal rate of 67 cents per mile. Keep a detailed log of your business miles.

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). However, you only pay this tax on earnings over $400.

You'll calculate your self-employment tax on Schedule SE, "Self-Employment Tax." This form is filed along with your Form 1040. The good news is that you can deduct one-half of your self-employment tax from your gross income, which helps reduce your overall tax liability.

Closing Tip for Kentucky Residents

Tax laws can be complex, and it's easy to miss deductions or make errors. Consider keeping meticulous records of all your income and expenses throughout the year. For Kentucky residents, remember to factor in the 4.0% flat income tax rate when estimating your tax liability. If your streaming income is substantial or your tax situation is complicated, consulting with a qualified tax professional (like myself!) is always a wise investment. Good luck with your streams, and happy filing!