Can I File Schedule C-EZ? How Do I Complete Schedule C-EZ?

Question: Can I File Schedule C-EZ? How Do I Complete Schedule C-EZ?

Answer:

When Can I File a Schedule C-EZ?
Most small businesses must use Schedule C to calculate their business taxes. But small companies may be able to use Schedule C-EZ instead.

The IRS says:

Small businesses and statutory employees with expenses of $5,000 or less may be able to file Schedule C-EZ instead of Schedule C.

More specifically, you can use Schedule C-EZ if:

• You had business expenses of $5,000 or less
  
• You use the cash method of accounting
  
• Had no inventory at any time during the year
  
• Did not have a net loss from your business; in other words, your business had a profit for the year
  
• And had only one business as either sole proprietor, qualified joint venture, or statutory employee.

All of the above must be true, for you to use Schedule C-EZ.

How Do I Complete Schedule C-EZ?

1. Complete the general information about your business:
   
   • Principal business or profession
     
   • business code (NAICS code)
     
   • Tax ID (EIN or other)
     
   • Business name and address.
2. Total your gross receipts (income/sales)
   
3. Total your business expenses
   
4. Subtract expenses from receipts to get your net profit.
   
5. Provide information about your vehicle, if you are claiming one for business purposes.

That's all you need to provide on this form. Of course, you should have all the documentation on your income, expenses, and vehicle, in case you get audited.

More information on Schedule C, including instructions on how to prepare, when you can use Schedule C-EZ, and more.