Tax Write-Offs for People That Work in the Video Game Industry

If this is work, it might be deductible.
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Whether you run a business in the video game industry, work as a contractor for a video game company, or are an employee of a video game company, if you take work-related expenses out of pocket you might be eligible to claim deductions fro them. You'll be entitled to claim any reasonable business expenses, but some are particularly noteworthy for video game workers.


1099 vs. W-2

The way that you deduct your expenses depends on how you get paid. If you're a business person or contractor that earns income on a 1099 that is subject to self-employment taxes, all of your expenses get subtracted from your gross income right on your Schedule C form. They aren't subject to any limitations and will reduce your income that is subject to self-employment tax as well as income tax. If you're an employee that gets paid on a W-2, you will need to itemize deductions to be able to file Form 2106 and claim your unreimbursed employee expenses. Your write off for your expenses and other miscellaneous deductions will also be limited to the amount that you spend that exceeds 2 percent of your Adjusted Gross Income.


Video of the Day

Computer and Software

If you provide your own computer and software for use in your position, you can deduct the expense of buying the computer and software as tools. Instead of depreciating the cost over the computer and software's life, you may be able to claim a Section 179 deduction that allows you to write off the entire cost in the year that you buy them. It'll be important to document your business use of the computer, especially if you use it for gaming within your job or your business.


Education and Research

Any money that you spend to improve your skills or to do research is also deductible. While you might be able to write off tuition on your regular income taxes, you can also write off the cost of professional publications and non-credit classes, seminars and webinars. All of your costs related to education -- including travel -- are also tax-deductible. This write-off also applies to traveling to conferences that are away from your home, so the costs associated with attending a video game conference are deductible if the event is job-related.


Home Office

If you maintain a home office for your video game work, it may be deductible. The IRS has strict rules for home offices, but if you use it as your primary workplace and it's exclusively used for work, you're well on your way to qualifying for the deduction. If you're an employee, you'll have to be able to prove that you have your home office because your employer requires you to and doesn't provide a primary workspace for you at his office. The home office deduction lets you write off a share of all of your home's expenses that is proportional to the share of your home that your home office occupies.



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