HVAC Breaking News

Oct. 4, 2004: IRS Change To Reduce Paperwork For Small Businesses

WASHINGTON - The Internal Revenue Service (IRS) announced that it will expand the number of small businesses eligible to file a simplified expense form. The IRS is doubling the business expense threshold to $5,000 from $2,500 for filing the Form 1040, Schedule C-EZ. This change came as a result of a recommendation by a Taxpayer Advocacy Panel subcommittee - Schedule C Fair Compliance Committee, Outreach, Education and Filing Subcommittee.

According to officials, the change will mean a savings of 5 million hours of paperwork burden for small business taxpayers. The threshold change means approximately 500,000 more small businesses - a 15 percent increase - will be able to file the Schedule C-EZ.

Karen Kerrigan, president and CEO of the Small Business Survival Committee (SBSC) and chair of the subcommittee, noted that the business expense threshold was last updated in 1996 and it made sense that it be increased to reflect inflation.

The Form 1040, Schedule C-EZ was first established in 1992. It was intended to make it easier for small businesses with modest expenses to file a simplified form. Small business owners that file a Form 1040 use the Schedule C to report profits and expenses.

The Taxpayer Advocacy Panel consists of 100 citizens from across the United States (two from each state) who review taxpayer concerns about IRS operations and make recommendations that will help improve operations and compliance efficiency for taxpayers. Members are appointed by the U.S. Secretary of the Treasury. For more information, visit www.improveirs.org.

Publication date: 10/04/2004

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