Sept. 28, 2004 -- On Friday, the Internal Revenue Service announced its plan to expand the number of businesses eligible to file a Schedule C-EZ, its simplified expense form, by doubling the expense threshold for filing.
According to the IRS, doubling the expense threshold to $5,000 from $2,500 for filing Form 1040, Schedule C-EZ, means approximately 500,000 small businesses will be able to submit them, increasing the number of small businesses eligible to use the form by 15%. The IRS also estimates that the change will reduce the number of hours small business taxpayers generally spend on paperwork by 5 million.
Senator Olympia J. Snowe (R-ME), who recently introduced The Small Business Compliance Assistance Enhancement Act of 2004 (S. 2834) aimed at helping make compliance easier on small businesses, applauded the IRS change. "I applaud this step by the Internal Revenue Service to lessen the compliance burden of small businesses by expanding the number of businesses able to use simplified tax forms," she said in a recent statement. "By making it easier to claim deductions for the cost of business investments, such as new equipment purchases, I believe we will provide additional fuel for economic growth that will expand our economy even more."
Schedule C-EZ was first introduced in 1992 as a way to make it easier for small businesses to report expenses. The Schedule C is used by business owners to report profits and expenses when submitting Form 1040.