What Was Schedule C-EZ?

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Definition

Schedule C-EZ was a simplified, streamlined version of Schedule C that was available to small business owners and sole proprietors prior to tax year 2019.

Key Takeaways

  • Schedule C-EZ was a less complicated version of Schedule C, which is filed by some small business owners to determine taxable income.
  • Numerous rules applied to qualifying to file this form rather than Schedule C.
  • Schedule C subtracts qualifying business deductions from income to arrive at taxable income. Schedule C-EZ provided a simpler means of making this calculation.
  • Schedule C-EZ was eliminated after the 2018 tax year.

How Schedule C-EZ Worked

Schedule C is filed with your Form 1040 tax return if you’re a sole proprietor or business owner. It lists all your sources of income and subtracts your qualifying business deductions to arrive at your taxable income from self-employment. Your taxable income is then transferred to your Form 1040.

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.

Note

Small businesses that filed Schedule C-EZ also had to pay self-employment taxes (Social Security and Medicare tax) on their profits. This required filing Schedule SE to calculate the self-employment tax and add it to your income tax on your Form 1040. 

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: 

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. 

Note

You should have kept all records on your income, expenses, and vehicle, in case you were audited. The IRS can go back as many as six years to perform an audit.

Frequently Asked Questions (FAQs)

Why was Schedule C-EZ discontinued?

The IRS eliminated at least eight tax forms after tax year 2018. The agency redesigned the Form 1040 tax return that year, and the Schedule C-EZ changes largely went hand in hand with that process. The idea was to streamline the filing process, eliminating the need for some taxpayers to file several additional schedules.

Can I still file Schedule C-EZ if I amend my 2018 tax return?

You may be out of time to amend your 2018 tax return. The general rule is that you have just three years after the date on which you filed your original return to file an amended return or two years after you paid any tax due on that return, whichever is later. Assuming you qualify to file an amended return under these rules, you could file Schedule C-EZ with that return because the schedule was still in use in that tax year.

Updated by
Beverly Bird
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Beverly Bird has been a writer and editor for 30+ years, covering tax breaks, tax preparation, and tax law. She also worked as a paralegal in the areas of tax law, bankruptcy, and family law from 1996 to 2010. Beverly has written and edited hundreds of articles for finance and legal sites like GOBankingRates, PocketSense, LegalZoom, and more.
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Sources
The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. IRS. “Schedule C-EZ Net Profit From Business,” Page 1.

  2. IRS. “About Schedule C-EZ (Form 1040), Net Profit from Business (Sole Proprietorship).”

  3. IRS. “About Schedule C (Form 1040), Profit or Loss from Business (Sole Proprietorship).”

  4. IRS. “IRS Audits."

  5. IRS. “Topic No. 308 Amended Returns.”

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