Some small businesses and sole proprietors were able to use Schedule C-EZ rather than deal with the far more complicated Schedule C through tax year 2018. But business owners had to meet certain requirements to qualify:
Business expenses of $5,000 or less during the year Used the cash method of accounting Had no inventory at any time during the tax year Did not have a net loss from their business Had only one business, either as a sole proprietor, a qualified joint venture, or they were a statutory employee. Had no employees during the year. Weren’t required to file depreciation or amortization for the business Did not deduct expenses for business use of their home Did not have prior-year unallowed passive activity losses from the business
Schedule C-EZ has not been available since the 2018 tax year. Sole proprietors must use Schedule C to file their small business tax returns for tax years 2019 and later.
Who Used Schedule C-EZ?
You could have only one business to qualify to use Schedule C-EZ. That business could be:
A sole proprietorship, which includes a single-member LLC business A qualified joint venture, which is a husband-wife partnership that files two schedule C forms You were a statutory employee (a sales representative, commissioned driver, or life insurance salesperson)
How To Fill Out and Read Schedule C-EZ
Completing Schedule C-EZ was a simplified process. You included C-EZ on your personal tax return. The net income from Schedule C-EZ was entered on Line 12 on the first page of the 2018 Form 1040 tax return.
Part I: General Information About Your Business
The following information was entered in Part I:
Principal business or profession Business code (NAICS code) Business name Tax ID (EIN or other) Business name and address.
Part II: Determine Net Profit
Gross receipts from your business were totaled in Part II. You would count income from work for others for which you may have received a 1099-MISC form. You would not include work for which you were an employee and received a W-2 form. You would then subtract expenses from receipts to get your net profit.
Part III: Business Use of Your Vehicle
You would provide information about the business use of your vehicle in Part III if you were claiming it for business purposes. You’d need to include the miles you drove for business purposes during the year, as well as your commuting/personal miles.
