Should You Start an LLC for a Video Game Streaming Side Hustle?

Are You Just Grinding for XP?

So you’re thinking about becoming the next Twitch star, huh? That’s awesome. You’ve got the skills, the charisma, maybe even a decent mic that doesn’t sound like you’re whispering into a tin can from 1997. And now you’re wondering… is it worth forming an LLC for your streaming efforts? Or should you keep button-mashing in the name of side hustle glory and figure out the tax stuff later?

First, What’s the Big Deal About Tax Write-Offs?

Here’s the simple version: the IRS wants a cut if you earn income. BUT if you have a legit business, you can deduct expenses that are ordinary and necessary to run that business. That’s right—those pricey gaming headphones, that second monitor, even the RGB light strip that makes your room look like a neon rave dungeon—if they’re used primarily for your stream, they might lower your taxable income.

That means paying less tax or potentially qualifying for a refund. And who doesn’t like that kind of loot?

What Counts as a Legit Write-Off?

Think of it like your inventory screen—if you use it for streaming, it might qualify. Here’s a short list:

Gaming PC or laptop (yep, even your beefy GPU)
Microphones, cameras, lights
Headsets, green screens, gaming chairs
Software (OBS, editing tools, royalty-free music licenses)
Internet service (a portion, not the whole bill)
Home office space (square footage used exclusively for your streaming setup)
Even part of your phone bill, if you’re using it to interact with fans or manage your stream.

And yes, games themselves could be a write-off too—if you’re streaming or reviewing them. (If you just wanna play Elden Ring at 2am for the 10th time in your boxers with no one watching… well, that’s just called Tuesday.)

So, Should You Form an LLC Right Now?

Let’s hit the pause menu here.

Starting an LLC is not a requirement to write off expenses if you’re making money. You can claim business expenses as a sole proprietor (which is what the IRS sees you as by default). That means you can deduct business-related expenses on Schedule C when you file your taxes—no LLC needed.

However, forming an LLC can offer benefits:

Legal protection (your personal stuff is safer if someone sues)
A more professional image (sponsors and brands might take you more seriously)
More options for tax treatment down the road (hello, S Corp)

But it also comes with costs: registration fees, annual reports, and possibly state taxes depending on where you live.

If you’re just starting out and haven’t made a dime yet, it might make sense to stream first, LLC later—especially if you’re just testing the waters. You can still track expenses, keep receipts, and log your hours like a pro. If the money starts rolling in (or trickling in… hey, progress is progress), then make the leap.

When Do the Write-Offs Actually Matter?

Here’s the kicker: you need to have income. The IRS isn’t into the idea of someone “starting a business” just to write off a $3,000 gaming rig and never making a cent. That’s called a hobby, and guess what? Hobbies don’t get write-offs.

To pass the “not-a-hobby” test, you’ll want to:

Try to make money (ads, subs, tips, affiliate links)
Keep records (a separate bank account helps)
Show some intent (branding, social presence, a schedule—even if it’s 2 viewers at first)

TL;DR: Game Streaming LLC

Track your expenses now.
Start streaming and try to earn income.
Skip the LLC at the beginning unless you want the legal protection or are going pro fast.
When your side hustle grows up a little, consider the LLC.
File your taxes with Schedule C if you’ve made money.

Lasting Nerd Tip

Don’t overcomplicate things before your first sub. Focus on building content, being consistent, and making people laugh, rage, or shout “let’s gooo!” at their screen. And when the income comes in? That’s when the real game of business taxes begins. And we’ll be right here—XP bar full and calculator in hand.

Need help setting up your streaming business the smart way? CPAnerds can guide you through the numbers, help with taxes, and yes—even tell you if that triple-monitor mount is a legit deduction.

Game on, streamer!