Can You Use Form C-EZ?
The IRS does provide a simplified version of Schedule C, known as Schedule C-EZ,
Net Profit From Business, that can be used by some sole proprietors,
primarily those who work as independent contractors for one or more larger
Whenever you have an option as to which tax form you can use, it's generally
best to use the simplest form that's available to you. There is some evidence
that the IRS is less likely to scrutinize tax returns that include the "EZ"
versions of the forms.
So, you'll want to use Schedule C-EZ if you're eligible, which means that
only one sole proprietorship business during the year
not have an inventory at any time during the year
not have any employees during the year
total business expenses that did not exceed $2,500
not deduct expenses for business use of your home
the cash method of accounting
not have a net loss
not have any prior-year unallowed passive activity losses for this
not required to file a Form 4562, Depreciation and Amortization,
for the year, which means that you did not place any depreciable property
into service for the first time this year, and you're not claiming
depreciation on any "listed property" such as a car, light truck,
motorcycle, cell phone, computer or peripherals, or photographic,
audio/video, or communications equipment
If you do not meet all of these requirements, you must file Schedule C this
year instead of C-EZ.
Among the Business Tools are Form
C and Schedule
C-EZ. They are in Adobe Acrobat .pdf format, and you will
need Acrobat Reader 4.0 to view the files and print them. A free
version of Acrobat 4.0 is available in the Business Tools area