Do you need to file income taxes for a small Etsy business that did not make any profit? (IE spending was a lot more than we made)?

[TurboTaxSusan]

You should report it as Self-Employment income. That way you can report both your income and expenses, and if you have a loss, you can carry it forward (or back) to other years.

If you report your Etsy earnings as Other Income, then you won't be able to claim the expenses.