Do I need to fill out Schedule C for 1099-MISC Twitch streaming royalties if I have a full-time job?

Thanks for the info! So I just double-checked my 1099-MISC and you're right - the amount is in Box 2 for royalties. I was getting confused because the tax software kept mentioning Schedule C whenever I entered anything from a 1099 form. If I use Schedule E instead of Schedule C, does that mean I completely avoid the self-employment tax forms? And can I still deduct all my streaming-related expenses like my microphone, games I bought specifically for streaming, etc?

Yes, by reporting the income on Schedule E instead of Schedule C, you avoid self-employment tax completely. This is one of the benefits of royalty income versus self-employment income. You can absolutely deduct your legitimate streaming expenses on Schedule E. This includes equipment like your microphone, the games you purchased specifically for streaming content, lighting, and any other ordinary and necessary expenses related to your streaming activity. Just be sure you're only deducting the portion used for streaming if any items have personal use too.

Did it actually help with figuring out which streaming expenses were deductible? I'm in a similar situation but spent way more on my setup and I'm worried about claiming too much and triggering an audit.

How does this compare to just talking to a tax pro? Seems like another AI tool promising the world but probably gives generic advice. Did it really understand the specific Twitch royalty situation?

It gave me a detailed breakdown of what streaming expenses qualify as legitimate deductions - including partial deductions for items with mixed personal/business use. It even explained how to document things properly to protect yourself in case of questions from the IRS. For Twitch specifically, it was spot on. It immediately recognized the Box 2 royalty classification and explained the difference between that and self-employment income. It wasn't generic at all - it analyzed my actual documents and provided specific guidance for my exact situation with Twitch royalties. Way more affordable than the $300+ quotes I got from tax pros for what ended up being a pretty straightforward situation once properly explained.

Wait, how does this actually work? Does it just call the IRS for you or something? I'm confused how a third party service can get you through the IRS phone maze when regular people can't.

Sorry but this sounds like a scam. The IRS doesn't give priority to calls from certain numbers or services. There's no magic way to skip the line that the rest of us have to wait in. I'm highly skeptical this actually works.

It uses an automated system that navigates the IRS phone tree and waits on hold for you. When an agent finally picks up, you get a call connecting you directly to them. So you don't have to sit there listening to hold music for hours - you just go about your day until they call you. It's definitely not a scam - it's just automating the painful hold process. The IRS doesn't know or care that you're using a service - from their perspective, it's just a normal call that waited through the queue like everyone else. The difference is that YOU don't personally have to sit through the wait time. I was skeptical too but it literally saved me hours of frustration.

Do you have a template or example of how you organize everything? I've just been keeping a folder of receipts but your system sounds much better. Also, do you track things like percentage of internet/electricity used for streaming?

I use a simple Google Sheet with columns for Date, Item, Cost, Category (equipment, games, subscriptions, etc.), and Notes (where I document why it's streaming-related). Nothing fancy but it works great! For internet and utilities, I keep it simple - I calculate the percentage of square footage my streaming setup takes in my home and the percentage of time I use it for streaming, then multiply those together to get a reasonable deduction percentage. For example, my setup is in about 10% of my home's space and I use it for streaming about 30% of the time I'm in that space, so I deduct 3% of those bills. The IRS rarely questions this method as long as you're reasonable and consistent.

Since we've established that Twitch royalties typically go on Schedule E (not Schedule C), they don't count as earned income for the Earned Income Tax Credit. This means they won't help you qualify for the EITC, but they also won't mess up your EITC calculation from your W-2 job. However, if some of your streaming income comes from other sources (like direct donations or merchandise) that would go on Schedule C, that portion could potentially affect your EITC - though in your case with an overall loss, it probably wouldn't negatively impact your credits.