Twitch Streamer Taxes in Montana - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Twitch Streamer income taxable in Montana?

Yes, absolutely. Income earned from Twitch streaming is considered taxable income by both the federal government and the state of Montana. The IRS treats Twitch streamers as self-employed individuals. This means you're essentially running your own business, even if it's a solo operation.

Federal Requirements (Schedule C): You'll report your Twitch income and expenses on Schedule C, "Profit or Loss From Business (Sole Proprietorship)," which is filed with your Form 1040. This form calculates your net profit (income minus expenses). It's crucial to keep detailed records of all income received from Twitch (including subscriptions, donations, bits, and sponsorships) and all related business expenses.

Montana Specific Rules: Montana has a graduated income tax system. This means the tax rate you pay increases as your taxable income increases. Your net profit from Schedule C will be added to your other income (if any) to determine your total taxable income for Montana. You'll then use the Montana tax brackets to calculate your state income tax liability. Montana also has a standard deduction and itemized deduction options, similar to the federal system, which can reduce your taxable income. You'll file Form 2, Montana Individual Income Tax Return, to report your state income tax.

Top Tax Write-offs for Twitch Streamers

As a self-employed streamer, you can significantly reduce your tax burden by claiming legitimate 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 (for background music during streams), and any subscription services essential for your stream (overlays, alerts) 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 you can deduct one-half of your self-employment tax from your gross income on Form 1040, which reduces your overall tax liability.

Closing Tip for Montana Residents

Navigating self-employment taxes can be complex. As a Montana resident, remember to keep meticulous records throughout the year. Consider making estimated tax payments quarterly to avoid penalties at tax time. The Montana Department of Revenue website (https://revenue.mt.gov/) is a valuable resource. Finally, consulting with a qualified tax professional specializing in self-employment income is always a wise investment to ensure you're maximizing your deductions and complying with all applicable tax laws. Good luck with your streams!