My husband has a FT job as an artist/designer and does some freelance art/design work on the side. I've always been mindful to show a profit on this so his side business isn't flagged a hobby (even though art is the only way he makes money, it's just that sometimes it's W2 and other times it's 1099), but as his W2 income and workload has increased in recent years, his freelance work has dwindled, and in 2017 he made ~$180.
I have read conflicting threads that say if you're a sole proprietor that it's OK to not file a Schedule C (my understanding if that's OK if you have less than $400 in income) : https://ttlc.intuit.com/questions/3680804-if-i-didn-t-make-any-income-in-my-self-employed-business-d...; and others that say unless you're closing the business it's a huge red flag to skip a year: https://ttlc.intuit.com/questions/3399547-no-schedule-c-income-in-2016-but-had-some-in-2015-and-expe...
Since he's not "closing" his business—at any point in the future his employment situation could change and his freelance income could pick up again—I'm not sure what the best way to document a couple slow years while his focus is on other income streams?
Thanks for the help!
if you have an actual business with revenue in some years (not just a hobby) file schedule C and report expenses (which would be minimal if nothing happened in 2017). you are entitled to the deduction.