Your business may be eligible to use the abbreviated Schedule C-EZ instead of the longer Schedule C when reporting business profit on your federal income tax return, according to the IRS. That’s because the deductible business expense threshold for filing Schedule C-EZ of the Form 1040 is $5,000. This change allows an additional 500,000 small businesses to file the C-EZ rather than Schedule C.
Schedule C-EZ, Net Profit from Business (Sole Proprietorship), is the simplified version of Schedule C, Profit or Loss from Business (Sole Proprietorship). It’s important to note that your business is not eligible to use the Schedule C-EZ to report a net loss from business.
Schedule C-EZ consists of an instruction page and a one-page form with three short parts — General Information, Figure Your Net Profit, and Information on Your Vehicle. The instruction page includes a worksheet for figuring the amount of deductible expenses. If you do not have a net business loss and the amount of deductible business expenses does not exceed $5,000, you should be able to use the C-EZ instead of Schedule C. Contact us to learn more!