Hey itch team,
When does my income from itch become something I need to report to the IRS? Full disclosure I've made less than $50 this past year. Was just curious as I was getting my tax stuff in order for filing!
I have never heard of any threshold under which you don't have to report income. I also make less than $50/yr on itch.io (we should form a club!) but I still report it (minus the itch.io and paypal cut) as self-employment business income on schedule C (and of course I deduct self-employment business expenses, such as app store registration fees, game engine licenses...which is a nice thing about having your own business.
https://www.irs.gov/businesses/small-businesses-self-employed/self-employed-indi...
Of course, I am not a tax lawyer, accountant, or IRS representative, so you might want to check with one of those to be sure.
Edit: there is a minimum threshold for total income that affects the requirement to file a tax return, but I gather as you're filing anyway, that's not the issue.
https://www.thebalance.com/are-you-required-to-file-a-tax-return-3192868
Has itch sent you a 1099 form or anything like that in the past? 2020 was my first year releasing stuff and making money off of it. Also, I don't technically have a business so can I still claim those things? Just curious what your own experience is here. Also I haven't withdrawn any of it so maybe I wouldn't have to pay it technically until the year I've withdrawn stuff?
A small thing that answered my question, I guess since I never had a payout last year I don't need to worry about it quite yet! Wanted to share this in case anyone stumbles across this thread with similar questions. I assume that means you won't get a 1099 until the year you actually get a payout
https://itch.io/t/769507/what-year-are-itch-payouts-counted-for
The irs has this quiz that people can answer, its not an actual answer but gives some information on what you may need to do: https://www.irs.gov/help/ita/do-i-need-to-file-a-tax-return