How does Schedule C-EZ differ from Schedule C?
Schedule C-EZ, Net Profit from Business is a simplified version of Schedule C that can be used if the taxpayer had only one business (sole proprietorship, qualified joint venture, or statutory employee) and the business:
- Uses the cash method;
- Has expenses of $5,000 or less;
- Doesn't have a net loss;
- Doesn't carry inventory;
- Doesn't have employees;
- Isn't required to file Form 4562 for amortization and depreciation;
- Doesn't have home office expenses; and
- Doesn't have prior-year unallowed passive activity losses.
(All of the above conditions must be met.)
TurboTax will file the correct schedule based on your business information, but sometimes it generates Schedule C even though your business meets all the conditions for a Schedule C-EZ. This is nothing to worry about – your calculations end up the same regardless.
Also, on returns with a Schedule C-EZ, TurboTax also creates a Schedule C for the background calculations, but only the C-EZ gets filed with the return.