Per the IRS Tax Code, "the Schedule C-EZ, Net Profit from Business (Sole Proprietorship), is the simplified version of Schedule C, Profit or Loss from Business (Sole Proprietorship)."
Using Schedule C-EZ can save considerable time, reduce the paperwork burden associated with the Filing of the Long Schedule C Form and Professional Filing fees associated with Schedule C. But the IRS has strict rules regarding who can use this Short Schedule C-EZ!
Taxpayers may be eligible to use the abbreviated Schedule C-EZ instead of the longer Schedule C when reporting business income and expenses on your Form 1040 federal income tax return.
Who Are the Eligible Taxpayers that use Schedule C-EZ?
Eligible Taxpayers are those that have a profit from their business and meet the following conditions as shown below:
- Their Total Expenses are not greater than $5,000.
- The Business has no employees.
- The Business has no inventory.
- The Business is not using depreciation or deducting the cost of your home.
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