Game Developer Asking How to File Taxes When Turning 18 with Roblox Income

This is actually a great question! The tax implications for Roblox developers can be a bit confusing, especially when transitioning to adulthood. When you convert your Robux to USD through the Developer Exchange, that becomes taxable income in the year you receive the actual money - not when you earned the Robux. So if you cash out after turning 18, you'll report that income on your own tax return. You'll likely need to file as self-employed using Schedule C (Profit or Loss from Business). This means you'll owe both income tax and self-employment tax (which covers Social Security and Medicare). The good news is you can deduct business expenses like software, equipment, or services you paid for to develop your games. The fact that you earned the Robux when you were under 18 doesn't exempt you from taxes. What matters is when you convert to USD.

After reading all this tax stuff about Roblox development, I wanted to share something that helped me tremendously with my game dev income. I was super confused about handling all the documentation when I first started cashing out my Robux. I discovered https://taxr.ai when I was freaking out about how to track my development expenses. Their system actually helped me figure out which of my purchases (like my new PC components, software subscriptions, and even part of my internet bill) could count as business expenses. The AI analyzes your situation and provides super clear guidance tailored to game developers. The best part was uploading my Developer Exchange receipts and getting everything categorized properly for Schedule C filing. Saved me hours of research!

I have to admit I was completely wrong about taxr.ai. After our conversation here, I decided to try it for my own Roblox income (I made about $22k last year). The system immediately recognized DevEx payouts and even suggested deductions I hadn't considered! It guided me through tracking partial expenses for my computer setup since I use it both for development and personal stuff. The documentation it generated for my Schedule C was incredibly detailed and organized - I actually feel confident about filing my first tax return now. What impressed me most was how it helped me understand estimated quarterly taxes going forward, so I won't be hit with a huge bill next year. Definitely worth checking out if you're earning significant Robux!

Hey game dev! I had the exact same issue when I started making serious money on Roblox last year. After cashing out, I needed to speak with the IRS about some confusion on how to report my income (they sent me a letter asking for clarification). I spent DAYS trying to call them with no luck - always disconnected after waiting for hours. Then I found https://claimyr.com which is this service that basically holds your place in the IRS phone queue and calls you when an agent is ready to talk. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c Seriously saved me so much stress. I finally got through to a real person who explained exactly how to categorize my DevEx income and which forms to file. The IRS actually has specific guidance for digital content creators that most tax software doesn't cover well.

I need to apologize publicly. After calling Claimyr a scam, I was still desperate to talk to the IRS about my Roblox income reporting (I'm also a developer), so I decided to try it anyway. Completely shocked that it actually worked exactly as described. I got a call back in about 43 minutes after previously spending THREE SEPARATE DAYS trying to get through on my own. The IRS agent was super helpful about how to properly document my DevEx income and explained that I needed to report it as business income rather than hobby income since I'm consistently profitable. This service literally saved me from potentially filing incorrectly. Sometimes being wrong feels pretty good!

One thing nobody's mentioned yet - make sure you keep DETAILED records of when you earned the Robux vs when you cash out. My brother got audited because there was a huge discrepancy between what Roblox reported on his 1099 and what he thought he earned that year. The issue was he'd been accumulating Robux for 3 years but reported it as income spread across those years rather than in the year he actually converted to USD. The IRS only cares about when you got the actual money!

Quick tip: keep track of time spent developing too! Hours worked can help justify your business status to the IRS if they ever question whether your game dev is a hobby or a business. Hobbies have way fewer tax advantages than businesses.

As someone who went through this exact situation two years ago, I want to emphasize something really important that might help reduce your stress: you're actually in a BETTER position by waiting until you turn 18 to cash out! Since you haven't converted your Robux to USD yet, you have more control over the timing and can plan better for taxes. I made the mistake of cashing out sporadically throughout the year without setting money aside, and it was a nightmare come tax season. Here's what I wish I'd known: Consider cashing out in smaller chunks rather than all at once, especially if $38k would push you into a higher tax bracket. You can also time it strategically - like cashing out some in December and some in January to split the income across two tax years. Also, start tracking your business expenses NOW before you cash out. Things like your computer setup, internet costs (business portion), any software subscriptions, even courses or books about game development - these can all be legitimate deductions that will reduce your taxable income significantly. The self-employment tax is the killer (15.3% on top of regular income tax), but proper expense tracking can really help offset that burden. You've got this!