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Is Your Business Eligible for Schedule C-EZ?

Person reviewing a receipt while filling out taxes

Your business may be eligible to use the abbreviated Schedule C-EZ instead of the longer Schedule C when reporting business profit and loss on your last year’s federal income tax return. According to the IRS, the deductible business expense threshold for filing Schedule C-EZ of the Form 1040 is $5,000.

Schedule C-EZ, Net Profit from Business (Sole Proprietorship), is the simplified, or easy, version of Schedule C, Profit or Loss from Business (Sole Proprietorship).

You may be eligible to file Schedule C-EZ if you meet the following criteria:

  • You only operate one sole proprietorship
  • You have less than $5,000 in business expenses
  • You are reporting a net profit
  • You don’t hold any business inventory like supplies or parts to make products
  • You don’t have any employees
  • You aren’t claiming any home office deductions

Schedule C-EZ consists of an instruction page and a one-page form with three short parts:

  • General Information
  • Figure Your Net Profit
  • Information on Your Vehicle

The instruction page includes a worksheet for figuring out the number of deductible expenses. If that amount does not exceed $5,000, you should be able to use the C-EZ instead of Schedule C.

Contact J Kelly & Associates to learn more about business tax deductions!

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