[FAQ]

Hey everyone,

So I just made affiliate a little while ago (so exciting!), and I’m on track to get my first real payout from Twitch. It just hit me that this is now official income, and I have absolutely no idea how to handle the tax side of things.

I’m in Canada, and I’m trying to figure out if I need to register myself as a business or something. Should I be putting a certain percentage of every payout into a separate account for taxes? What kind of things count as business expenses that I can maybe claim—like new hardware, or even the games I buy to play on stream? Any general advice on how to start off on the right foot with this would be a huge help.

[Jeff Bullas]

Treating your stream like a business from your first dollar is the smartest decision you can make.

Short Answer: You must treat all income from Twitch as self-employment or business income. The best practice is to immediately set aside a significant portion of each payout for taxes and meticulously track all stream-related expenses, but you absolutely must consult with a local tax professional for specific advice.

Let’s outline the professional way to organise the text-based and financial data of your new streaming business.

First, you need to begin keeping a detailed text ledger of all revenue your content generates. This means every payout from Twitch, broken down by subscriptions, Bits, and ad revenue, must be recorded in a spreadsheet. This document is the primary record of your business’s performance. Second, you must do the same for all your expenses. Any purchase made to support the creation of your content—from the video camera and microphone you use, to the software you subscribe to, to the very games you play on stream—is a potential business expense that needs to be tracked with corresponding receipts. Finally, and this is the most critical step, you must take this organised financial data to a qualified local accountant. Tax laws are complex and vary dramatically between countries and even states or provinces. A professional is the only person who can give you accurate, legally sound advice on what percentage to save, how to file, and what deductions you can claim for your specific situation.

Cheers,

Jeff

[Author]

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