Module NJ 1.9
Business Income
Schedule C-EZ
Pub 4012, Tab 2
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NJ Training TY 2008
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Taxpayer Business Income
Schedule C-EZ
 Operate a Business (regular and on-going
for purpose of sales and profit)
Or
 Sole proprietor

Must Report sales, expenses and net profit
(loss not permitted) on Schedule C-EZ
 Out of Scope - If TP does not qualify for
Schedule C-EZ and Schedule C is required
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Definitions
 Employee: Employer controls when, where, and
how the employee works (W-2 issued).
 Independent Contractor: Performs services for
others.

Self-Employed for Tax Purposes (No W-2 issued)
 Note: Household employees (baby sitters,
cleaning help, home health aides etc) income is
taxable to employee – Out Of Scope To Payer
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Schedule C-EZ Requirements
 Business expenses of $5,000 or less
 Cash method of accounting
 No inventory
 No net loss from business
 Sole proprietor, no employees
 Form 4562, Depreciation/Amortization, not
required
 No deduction for business use of home
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Schedule C-EZ Information
 Only one C-EZ per person on return
 “Business Code” Source


Press F-1 Help Button in Tax Wise
or
Refer to 1040 Instruction Booklet
 Employer ID Number (EIN)

If TP does not have an EIN, leave space blank. Do not enter SSN
 If TP has 1099-Misc, use TaxWise Link from C-EZ line 1
Gross Receipts, to enter 1099 data
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Schedule C-EZ
F1 for List
USE SCRATCH PAD
FOR EXPENSES
F9 to 1099-MISC OR
SCRATCH PAD FOR
INCOME
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Allowable Business Expenses
 Repairs and
 Advertising
 Vehicle expenses
 Mileage or actual
expenses – see below
 Commissions
 Insurance
 Interest
 Office & rent expense
maintenance
 Supplies
 Taxes
 Travel
 Utilities
 50% of business
meals/entertainment
 Professional fees
Mileage expense calculated by TW must be manually entered on scratch
pad with other expenses – it does not automatically transfer
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Taxes On Self-Employment Income
 Social Security and Medicare tax for persons who
work for themselves is 15.3%
 Similar to SS tax and Medicare tax withheld from
employees’ wages
 Computed on Schedule SE and is automatically
transferred to Form 1040
 In TaxWise, entry on line 1 of C-EZ will
automatically generate Schedule SE
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