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Requirements for filing business taxes?
While she can certainly get an LLC or EIN, it isn't necessarily required or needed.  She can file as a sole-proprietor on her (or your joint) taxes by filling out a schedule-C addition to the 1040.  Any income or losses will pass through to your existing income situation (from W-2's and such). The general requirement for filing as a business in this regard has nothing to do with any minimum income, revenue, or size.  It is simply the intent to treat it as a business, and unlike a hobby, the overall intent to earn a profit eventually. If you're currently reporting the 1099-MISC income, but not deducting the expenses, this would be a means for you to offset the income with the expenses you mentioned (and possibly other legitimate ones).  There is no "2% AGI" restriction for schedule-C.