Twitch Streamer Taxes in New Mexico - 2025 Guide

Updated for 2025 (Filing 2024 Taxes)

Is Twitch Streamer income taxable in New Mexico?

Yes, absolutely. Income earned from Twitch streaming is considered taxable income by both the federal government and the state of New Mexico. 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 tax.

Federal Requirements (Schedule C): You'll 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 overall income. Keep meticulous records of all income received from Twitch – 1099-K forms will be issued if you meet certain thresholds ($20,000 in payments and more than 200 transactions, though these thresholds are subject to change, so always verify with the IRS).

New Mexico Specific Rules: New Mexico has a graduated income tax system. This means the tax rate you pay increases as your taxable income increases. You'll use Form R-1110 to calculate your New Mexico income tax liability. Your federal adjusted gross income (AGI) is the starting point for calculating your New Mexico taxable income. New Mexico also has various deductions and credits that may reduce your tax bill, so it's important to explore those options. You'll report your Schedule C profit on your New Mexico tax return.

Top Tax Write-offs for Twitch Streamers

As a self-employed streamer, you can significantly reduce your tax liability 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 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 standard mileage rate. For 2024, the rate is approximately 67 cents per mile (verify the official IRS rate at IRS.gov). Keep a detailed mileage log.

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 – a combined 15.3% (12.4% for Social Security up to the annual wage base, and 2.9% for Medicare).

You'll calculate this tax on Schedule SE (Self-Employment Tax). The good news is 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 net earnings over $400.

Closing Tip for New Mexico Residents

Navigating self-employment taxes can be complex. As a New Mexico resident, remember to factor in the state's graduated income tax rates and explore all available deductions and credits. Consider consulting with a qualified tax professional, especially in your first few years of streaming, to ensure you're maximizing your deductions and complying with all federal and New Mexico tax laws. Keeping accurate records throughout the year will make tax time much smoother.