Question

Options for Selecting Between Schedule C or Schedule C-EZ

Accepted Answer

Although a taxpayer may be eligible to use Federal Schedule C-EZ, it is never required (i.e. you can still file Schedule C).

The IRS instructions for Schedule C-EZ, Net Profit From Business (Sole Proprietorship), indicate you may use Schedule C-EZ instead of Schedule C Profit or Loss from Business (Sole Proprietorship), only if you meet all of the following qualifications:

Had business expenses of $5,000 or less,
Use the cash method of accounting,
Did not have an inventory at any time during the year,
Did not have a net loss from your business,
Had only one business as either a sole proprietor, qualified joint venture, or statutory employee,
Had no employees during the year,
Do not deduct expenses for business use of your home,
Do not have prior year unallowed passive activity losses from this business, and
Are not required to file Form 4562, Depreciation and Amortization, for this business. (See the instructions for Schedule C, line 13, to find out if you must file.)

Depending on which TaxAct program you are using, you may be prompted to upgrade during the Self-Employment interview section.

To enter the data in the program to complete Schedule C OR Schedule C-EZ:

From within your TaxAct return (Online or Desktop), click Federal. On smaller devices, click the menu icon in the upper left-hand corner, then select Federal.
Click Business Income in the Federal Quick Q&A Topics menu to expand the category and then click Business income or loss from a sole proprietorship
Click New Copy of Federal Schedule C (Desktop users click Add) to create a new copy of the form or click Review to review a form already created
The program will proceed with the interview questions for you to enter or review the appropriate information

Online Navigation Instructions

If you have the TaxAct Online Premium+ Edition, the program will automatically create a Schedule C (even if the return qualifies for Schedule C-EZ), however, if the return qualifies, users can follow the steps below to select Schedule C-EZ be used in the return:

From within your TaxAct Online return, click Federal. On smaller devices, click the menu icon in the upper left-hand corner, then select Federal.
Click Business Income in the Federal Quick Q&A Topics menu to expand the category and then click Business income or loss from a sole proprietorship to expand that category. Note. You will only be able to expand the second category if the return currently qualifies for Schedule C-EZ. If it does not, you will be taken to the screen to start the review of the Schedule C entries.
Select Schedule C-EZ and on the following screen click the box Click this box if you would like to print/file C-EZ instead of Schedule C for this business
The program will then return you to the Federal Quick Q&A Topics screen. If you print or print preview your return you will see Schedule C-EZ instead of Schedule C. Note. If at any time the information currently entered in the return does not qualify the return to use Schedule C-EZ, you would continue to see Schedule C in the return.

Desktop Navigation Instructions

If you have the TaxAct Desktop Edition, the program will automatically create whichever schedule the return qualifies for (Schedule C-EZ or Schedule C), depending on the information entered in the program. Note. If entering information via the Forms Method, you must enter the information on the Schedule C (you are not able to enter the information on the Schedule C-EZ). Once the information is entered, if the return qualifies for a Schedule C-EZ, that is what will print/be filed with the return.

Professional Editions Navigation Instructions

If you have the TaxAct Professional Edition, the program will automatically create whichever schedule the return qualifies for (Schedule C-EZ or Schedule C), depending on the information entered in the program; however, if the return qualifies for Schedule C-EZ, Schedule C can be selected by checking a box at the top of the Schedule C-EZ after the information is entered. Note. If entering information via the Forms Method, you must enter the information on the Schedule C (you are not able to enter the information on the Schedule C-EZ). Once the information is entered, if the return qualifies for a Schedule C-EZ, that is what will print/be filed with the return.

Start your TaxAct program
Click the Forms button in the top left corner
Expand the Federal folder and then expand the Forms and Schedules folder
Scroll down and click '+' next to Schedule C-EZ - Net Profit from Business
Double click the copy you wish to change to Schedule C
At the top of the Schedule C-EZ form, check the box Check here to file Schedule C instead of Schedule C-EZ (Prep Only)
If you print or print preview the return you will see Schedule C-EZ instead of Schedule C. Note. If at any time the information currently entered in the return does not qualify the return to use Schedule C-EZ, you would continue to see Schedule C in the return.