Want to save time and trouble when filing taxes for your small business? You may be eligible to use the abbreviated Schedule C-EZ instead...
Want to save time and trouble when filing taxes for your small business?
You may be eligible to use the abbreviated Schedule C-EZ instead of the longer Schedule C when reporting business income and expenses on your 2007 Form 1040 federal-income-tax return.
The maximum deductible business-expense threshold for filing Schedule C-EZ is $5,000.
Schedule C-EZ, Net Profit From Business (Sole Proprietorship), is the simplified version of Schedule C, Profit or Loss from Business (Sole Proprietorship). Schedule C-EZ has an instruction page and a one-page form with three short parts — General Information, Figure Your Net Profit, and Information on Your Vehicle. It includes a simple work sheet for figuring the amount of deductible expenses.
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If that amount does not exceed $5,000 and if your business did not have a net loss, you may be able to use the C-EZ instead of Schedule C. (Other restrictions apply; be sure to read the instructions carefully.)
Schedule C is two pages long and is divided into five parts — Income, Expenses, Cost of Goods Sold, Information on Your Vehicle, and Other Expenses.
It requires more detailed information than the C-EZ. The instruction package is 10 pages long.
Schedule C must be used when deductible business expenses exceed $5,000 or when a business has a net loss.
Using Schedule C-EZ can save time and reduce paper for eligible businesses.
More information about Schedule C-EZ and reporting net profit for sole proprietorships can be found on the IRS Web site at www.irs.gov.
— Internal Revenue Service