Twitch Streamer Taxes in Michigan - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Twitch Streamer income taxable in Michigan?

Yes, absolutely. Income earned from Twitch streaming is considered taxable income by both the federal government and the state of Michigan. The IRS treats Twitch streamers as self-employed individuals. This means you're responsible for reporting your earnings and paying both income tax and self-employment taxes.

Federal Requirements (Schedule C): You will report your Twitch income and expenses on Schedule C (Profit or Loss From Business) when you file your federal income tax return (Form 1040). This form calculates your net profit (income minus expenses), which is then added to your other income to determine your adjusted gross income (AGI). Keep meticulous records of all income received from Twitch (including subscriptions, bits, donations, and sponsorships) and all related business expenses.

Michigan Specific Rules: Michigan has a flat income tax rate of 4.05% for the 2024 tax year (filing in 2025). Your net profit from Schedule C will be included in your Michigan income tax calculation. You'll file Form MI-1040 to report your income and calculate your Michigan tax liability. Michigan also allows for itemized deductions, which may further reduce your taxable income, but the standard deduction is often more beneficial.

Top Tax Write-offs for Twitch Streamers

As a self-employed streamer, you can significantly reduce your tax burden by claiming eligible business expenses. Here are some common deductions:

• 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 subscription services essential for your stream 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 IRS standard rate. For 2024, the rate is approximately 67 cents per mile. Keep a detailed mileage log with 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 streamer, 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 income tax liability.

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

Closing Tip for Michigan Residents

Navigating taxes as a Twitch streamer can be complex. I strongly recommend keeping detailed records of all income and expenses throughout the year. Consider using accounting software or working with a qualified tax professional, especially one familiar with self-employment and the Michigan tax system. Proactive tax planning can save you money and prevent potential issues with the IRS or the Michigan Department of Treasury. Good luck with your streams, and happy filing!