I don't understand what minimum income you are looking at. Tax is not calculated separately for each business. If you have enough income from your independent contracting that you have to pay tax, then your Etsy income will be taxed as well, no matter how little it is.
It sounds like you have two distinct businesses. You should enter them as two separate businesses in TurboTax, so you will have one Schedule C for independent contracting, and another Schedule C for the Etsy shop. The expenses for each business go on the Schedule C for that business. But in effect they will offset each other, because a loss in one business will offset profit from the other business. Your tax is calculated on your total net business income from both businesses combined.
Note that even if you don't have enough income to have to pay income tax, you have to pay self-employment tax if your net self-employment income is over $432. And you are required to file a tax return if your net self-employment income is $400 or more.
