Updated for 2025 (Filing 2024 Taxes)
Yes, absolutely. Income earned from Twitch streaming is considered taxable income at both the federal and Oregon state levels. The IRS views Twitch streamers as self-employed individuals, meaning you're essentially running your own business.
Federal Requirements: You'll report your Twitch income on Schedule C (Profit or Loss from Business) as part of your Form 1040. This form details your revenue (Twitch payouts, subscriptions, donations, bits) and allows you to deduct business expenses (more on that below). Even if you receive a 1099-K from Twitch, you must report all income, not just what's on the form. The $400 threshold applies for needing to file a Schedule SE (see section 3).
Oregon Specific Rules: Oregon has a graduated income tax system. This means the tax rate you pay increases as your income increases. Your Twitch income, after deducting business expenses on your Schedule C, will be added to your other income (if any) to determine your total taxable income for Oregon. This total income then falls into different tax brackets, each with a corresponding tax rate. You'll use Form OR-40 to file your Oregon state income tax return. Oregon also has a standard deduction and potential itemized deductions, similar to the federal system, which can reduce your taxable income.
As a self-employed streamer, you can significantly reduce your tax liability by claiming legitimate business expenses. Here are some common deductions:
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%.
You'll calculate this tax on Schedule SE (Self-Employment Tax). However, you only pay self-employment tax on your net earnings (profit) from Schedule C after subtracting business expenses. You also get to 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.
Navigating self-employment taxes can be complex, especially with Oregon's graduated income tax system. 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!) to ensure you're taking all eligible deductions and complying with both federal and Oregon state tax laws. Proactive tax planning can save you significant money and stress during filing season. Good luck with your streams!
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