You, a streamer earning income from streaming, have opened up a world of opportunity but also a world of new forms you’ll need to fill out for the IRS. It’s tax time folks. We’re going to cover some basics on the different forms you might need to fill out as a small business owner. Please see our article on tax basics because it’s highly relevant to these documents.

The 1040

The 1040 is the form you file for an individual (as opposed to business) tax return. If you use something like TurboTax to do it yourself their questions are designed to walk you through all of the parts of the form. If you work with someone else to get your taxes done they’ll be working on it as well, though they’ll also have to add their information to the bottom. Please, please don’t try to do this on pen and paper yourself. It’s a pain for you and a pain for the IRS, and that’s an unfortunate amount of pain.

If you’re an American citizen you need to do this unless you’re someone else’s dependent and didn’t earn money, earned no income for the last several years, or want the IRS to come knocking at your door for money and potentially for you to go to prison. Yes, even if you’re an American citizen living abroad you still need to fill out the 1040.

This is the central form to which the information from all of the other forms flows. Overall, your goal is to get your total paid in taxes throughout the year to equal what you owe. If you do it correctly you will owe nothing and get no refund. You enter in your personal information, calculate your adjusted gross income, and go through the available deductions and credits to see if you can reduce your bill.

The Schedule C

The Schedule C is where you fill out the profits or loss from your business. The concept is fairly straight forward but there can be a lot of moving parts that make it both better for you (reduced taxes) and more complex. As an income-earning streamer, it might make sense to have someone help you with this form. Yes, you could do it yourself but that’s a lot of effort you’re spending on something you’re probably not an expert on. As always, the IRS has an exhaustive list of instructions for this form so if you’re bound and determined to do it yourself make sure to follow those to the letter.

I would pay special attention to the business expenses section. As I mentioned before you have a really big opportunity to reduce the taxes on your income by tracking your expenses. For most items you can reduce your income by those expenses. Imagine you paid a 25% tax rate across the board. If you made $50,000 that’s $12,500 in taxes for the year. However, if you were a business owner and the business spent $10,000 to earn that income you’d only be taxed on $40,000. That’s $10,000 in taxes or a $2,500 savings. DON’T FORGET TO TRACK YOUR EXPENSES!

If you’re in a partnership (and I mean legally you organized as a partnership) then you would use the Schedule K-1 instead of the Schedule C.

The Schedule SE

The SE in Schedule SE stands for self-employment, so this is the form where you’re calculating your self-employment taxes. The self-employment tax is the government’s way of making sure you’re still paying for Social Security and Medicare. You may have noticed that on your paychecks from an employer you had a line for FICA deductions. That’s your combined Social Security (6.2%) and Medicare (1.45%) taxes. You, the employee, paid a grand total of 7.65% of your income towards those programs. Well guess what? Your employer also paid those taxes.

This is the key thing that most people don’t understand about going out on their own. You’re now responsible for both the employee and employer part of your taxes. That extra 7.65% is your self-employment tax. You pay it in addition to your income taxes so earning income from self-employment can be a little more expensive than earnings from work. You shouldn’t avoid going out on your own because of self-employment taxes but you should be aware of the cost.

Your self-employment tax is deductible as a business expense so you do at least get a bit of a break from it. Also, only $118,500 for 2016 is subject to 12.4% of the tax. If you earn more than that you pay full self-employment taxes on the first $118,500 and then only the 2.9% for Medicare on the rest of your earnings.

The 1099

If you paid someone over $600 as a contractor not an employee, and let’s be honest here unless you’re really, really big, it’s a contractor, you need to fill out the 1099. You have to fill in information about you, what you paid them (likely “other income”), and if you withheld anything for taxes for them. Then, you put in their information and send one copy to the IRS and one copy to the contractor.

Similarly, if you’re a contractor and you received a payment from someone else you’ll get a 1099. Unless you specifically asked them to withhold taxes you’ll be on the hook for all of the taxes coming your way. You want to keep a really good sense of what you owe. It would be really terrible to take on some extra work for some extra income and have it bring you more hassle than it’s worth.