The Schedule C EZ form was the simplest way to file taxes for the smallest business owners. Unfortunately, it is not an option anymore, but the IRS did make some changes to simplify reporting on Schedule C.
- What is a Schedule C EZ
- Schedule C EZ requirements
- How to Simplify reporting on a Schedule C
What Is A Schedule C EZ?
Up until 2019 the Schedule C EZ was available for business owners to quickly report business profit. The difference between a Schedule C EZ and a Schedule C was that you could perform a basic calculation of profit, instead of reporting all business expenses and revenues to arrive at net income/loss, as Schedule C required.
Who Can File A Schedule C EZ?
Unfortunately nobody can file the Schedule C EZ now. The form was phased out by the IRS in 2019. In its heyday it was used by Sole Proprietors, Single Member LLCs, and Freelancers.
Schedule C EZ Requirements
There were a few business criteria you had to meet to be permitted to use the old Schedule C EZ form. When a person didn’t meet one of these requirements they had to report using the Schedule C:
- Less than $5000 in business expenses
- Reporting a profitable year, you could not report a loss
- No inventory
- No employees
- Cash accounting only
- Only own one business
- Not taking a home office deduction
- Limitations on depreciation or amortization expenses
The Tax Museum: Schedule C EZ
Here is an example of what the old Schedule C EZ Form looked like. You’ll notice it was a watered-down version of the Schedule C, with checkboxes and a quick profit calculation that facilitated reporting for people that were working side hustles.
How To Simplify Reporting For Schedule C
Since the Schedule C EZ is no longer available, all business owners must report earnings on a Schedule C. There are 2 ways to simplify reporting on this form.
1. Standard Business Income Tax Deduction
The standard business deduction is a set deduction you can make versus itemizing business expenses. The IRS does not require you to save receipts when taking the standard tax deduction but it is always wise to maintain the books for your business. The standard business deduction amounts are figured by your filing status and are subject to change.
When filing for the 2021 tax year the deductions are:
- $12,550 for single filers
- $25,100 for married couples filing jointly
For 2022 deductions increase to:
- $12,950 for singles
- $25,900 for married couples filing jointly
This makes filing the Schedule C simplified like a Schedule C EZ. One thing to note about using this deduction is that you cannot itemize deductions for mortgage interest, charitable contribution, and state and local taxes.
2. Proper Accounting
Even if you are taking the standard business deduction, that doesn’t mean you should skip on accounting for your business. All businesses should track income and expenses, and keep transactional data on file for 5-7 years. This will help in the event the IRS picks your name from a hat for an audit.
Gone Are The Days Of A Schedule C EZ
Unfortunately the Schedule C EZ is not available to file anymore. It doesn’t look like it will be coming back anytime soon. It is not so bad though we have multiple resources to help you while filing your business income on a Schedule C. Check out the tax section in our blog for more pro tips.