If you’re a streamer or pro gamer, you likely file your taxes as an independent contractor. If that is the case, there are a number of self-employed deductions you can make on your taxes that you may not be making already. In an industry like gaming, where you game both professionally and for fun, it can seem confusing what qualifies as a business expense versus entertainment.
Business expenses are things you spend money on that are directly related to your work, including (but not limited to) your internet bill, travel for tournaments, and home office expenses like rent. Many purchases that streamers and pro gamers make on a regular basis qualify for deductions on your taxes at the end of the year.
1. Home office
If you have a designated area or room for gaming, you can write off home office expenses on your taxes. There are two ways to make this deduction: the standard method or the simplified option.
The simplified option gives you a rate of $5/square foot up to 300 square feet, meaning you can deduct up to $1,500. If your home office or gaming area is less than 300 square feet, this could be a safer option. By going with the standard method, you will have to calculate your home office expenses and keep a detailed record in the event of an audit.
2. Internet bill
Even if you are not claiming a home office deduction, you can still write off a portion of your internet bill that you use for streaming, competing in online tournaments, or corresponding with your organization about work-related topics. Figure out how much you use your internet for work-related tasks and deduct accordingly.
3. Software subscriptions
If you have software subscriptions connected to streaming or pro gaming such as FACEIT or ESEA, you can write off the cost of the software on your tax return. Only write off subscriptions that are directly related to pro gaming or streaming. Subscriptions for Xbox Game Pass or PS Plus are examples of subscriptions that would be unlikely to qualify for a deduction.
4. PC and streaming hardware
If you are purchasing hardware for streaming or specifically related to competing, such as an Elgato Stream Deck, webcam for streaming, or a new headset you use to train and compete, you may be able to write these expenses off as part of your home office expenses.
5. Travel for tournaments
If you travel by plane or car to tournaments or other work-related events, you can write off your travel expenses for plane fare, gas, and mileage. You can also write off the cost of meals on business trips if you are traveling out of town, but only 50%.
You are only able to write off expenses that are directly related to business, so if you are mixing business with pleasure (eg. traveling out of state for a tournament and also visiting friends socially), it can get a little more complicated. Make sure to keep detailed records of miles, gas purchases, and other costs to ensure that you are properly deducting these items on your tax return.
While you’re doing your taxes, make sure to keep your records organized in case of an audit. This means holding onto receipts, tracking mileage, and making sure you have your dates for travel recorded somewhere you can easily access. Even if your risk of getting audited is low, there is always a chance it can happen.
It’s always better to be safe than sorry, this article does not replace advice from a licensed tax professional. If you have any questions or if you are unsure about whether or not you can write something off on your taxes, consult a CPA or tax professional to make sure you are properly filing your self-employment taxes.