A few comments:
- There is no income threshold that determines whether a taxpayer will be audited. There are millions of low-income taxpayers
- The issue that I see is in determining whether you and your husband have a business or a hobby.
- There has to be a true intent to make a profit.
- An activity is presumed carried on for profit if it produced a profit in at least three of the last five tax years, including the current year. This is just a presumption used by the IRS and not a definitive test. However, if your schedule C's continue to show losses, there is a risk that the IRS algorithm may trigger an audit or at least a notice.
- What you need to focus on and get some direction, is whether you have a trade or business and are entitled to take the deductions.
*A reminder that posts in a forum such as this do not constitute tax advice.
Also keep in mind the date of replies, as tax law changes.
