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[c-kris-yj]

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[Anonymous_]

You need to decide based upon the factors listed in the IRS Fact Sheet at the link below.

https://www.irs.gov/pub/irs-news/fs-08-23.pdf

[Opus 17]

See this blog post.
https://turbotax.intuit.com/tax-tips/small-business-taxes/when-the-irs-classifies-your-business-as-a...

In general, if you don’t make a profit at least 2 out of the past 5 years, the IRS may assume that you are really running a hobby. However, you can rebut this presumption by showing facts and circumstances that indicate that you are running a business with a true profit motive, just that you haven’t been able to make a profit.

My suggestion is that you file your return based on your best interpretation of your facts and circumstances. If your facts and circumstances indicate that you are running a business, then go ahead and continue to file your business losses, and use them to offset your other taxable income. However, be prepared to defend yourself in case the IRS tries to rule that you have a hobby instead. You may want to hire a professional to help you make the determination. 

[Anonymous_]

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@Opus 17 wrote:

In general, if you don’t make a profit at least 2 out of the past 5 years, the IRS may assume that you are really running a hobby. 

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The presumption, per Section 183(d), does not work in that manner. Rather, the presumption is simply that an activity is engaged in for profit if gross income exceeds deductions for the past 3 out of 5 years. 

[TomD8]

"For about 2-3 years, my 1099 was at a loss" 

How long have you been filing a Schedule C?  If you've filed for several years showing a net profit, and then had 2-3 years with a net loss, it's highly unlikely that the IRS will regard your business as a hobby.  As an example, many realtors had a net loss when housing sales collapsed, after they'd had years of showing a profit.  The IRS "gets" that this can happen.

[c-kris-yj]

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[TomD8]

One of the best ways to reduce taxable W-2 income is to contribute to your employer's traditional 401K plan (if they have one).  Every dollar you contribute will reduce your current taxable income by an equal amount.

[c-kris-yj]

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[Mike9241]

not sure what version you're using, but in mine the 1099 only asks for the payer's name, not the business name.

The 1099 is then linked to Schedule C. On Schedule C is where you'll find the place to enter the business name but note no business name is required if there is no separate business name (that seems to be your situation). 

As long as it's the same business activity the 5-year period for the hobby loss rule is not reset.

[AmeliesUncle]

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@c-kris-yj wrote:

if I labeled it as "Selling" in the business name/type for the 1099 in a previous year and decide to change it to something like "Shoe Business" the following year, does this categorize it as an entirely new business, potentially resetting the 5-year consecutive rule?

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If you are trying to hide the facts of the situation, that could be "tax fraud".

[c-kris-yj]

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