1040EZ Form
As a business owner or taxpayer, you may remember IRS Form 1040EZ as the simplest way to file individual tax returns. Designed for single and joint filers with basic income and no deductions, Form 1040EZ was discontinued in 2018 and replaced by the streamlined Form 1040.
Now, all taxpayers—including those with business income, self-employment earnings, and investments—must file Form 1040, which consolidates the previous 1040, 1040A, and 1040EZ into one form.
Definition of Form 1040EZ
Form 1040EZ was a simplified version of the U.S. Individual Income Tax Return, designed for taxpayers who:
✔ Had taxable income below $100,000.
✔ Only earned wages, salaries, tips, and limited interest income.
✔ Did not claim dependents or itemized deductions.
✔ Used the standard deduction instead of itemizing expenses.
Since 2018, Form 1040EZ is no longer available—all taxpayers now use Form 1040, which accommodates various income levels, deductions, and credits.
Definition of Form 1040EZ
Form 1040EZ was a simplified version of the U.S. Individual Income Tax Return, designed for taxpayers who:
✔ Had taxable income below $100,000.
✔ Only earned wages, salaries, tips, and limited interest income.
✔ Did not claim dependents or itemized deductions.
✔ Used the standard deduction instead of itemizing expenses.
Since 2018, Form 1040EZ is no longer available—all taxpayers now use Form 1040, which accommodates various income levels, deductions, and credits.
Explanation: why was Form 1040EZ discontinued?
Previously, taxpayers had three primary tax filing options:
✔ Form 1040EZ – For simple returns (single filers, no dependents, no deductions).
✔ Form 1040A – For moderate-income earners with basic deductions and credits.
✔ Form 1040 – For all taxpayers, including those with self-employment, business income, and investments.
In 2018, the IRS eliminated Form 1040EZ and Form 1040A, consolidating all individual tax returns into a single redesigned Form 1040. This change simplified the filing process while allowing more flexibility for taxpayers with different income sources.
Real-life example: Transition from 1040EZ to 1040
Scenario: A freelancer files taxes after 1040EZ was discontinued
Before 2018, a part-time retail worker earning $35,000 annually could file Form 1040EZ because they had:
✔ No dependents.
✔ No deductions beyond the standard deduction.
✔ Only W-2 wages (no self-employment or investment income).
After 2018, they must file Form 1040, which now accommodates all tax situations, including self-employment and additional credits.
Why is the elimination of Form 1040EZ important for business owners?
1. Allows more deductions and tax savings
Form 1040 accommodates a wider range of deductions and credits, benefiting business owners and self-employed individuals.
✔ Self-employment deductions (home office, business expenses).
✔ Investment income reporting (capital gains, dividends).
✔ Itemized deductions for larger tax savings.
Example: A gig worker previously using 1040EZ now claims self-employment expenses on Form 1040, reducing taxable income.
2. Covers all tax situations with one simplified form
The IRS merged 1040EZ into Form 1040 so all taxpayers use one standardized tax return.
✔ No confusion over which form to use.
✔ More flexibility for different income sources.
Example: A part-time freelancer with both W-2 and 1099 income now files Form 1040 with Schedule C instead of being ineligible for 1040EZ.
3. Enables reporting of business and investment income
Previously, Form 1040EZ did not allow:
Self-employment income (Schedule C required Form 1040).
Capital gains reporting (Schedule D required Form 1040).
Rental property income (Schedule E required Form 1040).
With Form 1040, business owners and investors can report all income sources on a single return.
Example: A self-employed photographer who previously couldn’t file 1040EZ now easily reports business expenses and profits on Form 1040 with Schedule C.
Form 1040 vs. 1040EZ: What’s the difference?
| Feature | Form 1040EZ (Discontinued) | Form 1040 (Current) |
| Available for tax years | Before 2018 | 2018 and later |
| Income limit | $100,000 or less | No income limit |
| Self-employment income? | ❌ No | ✅ Yes (Schedule C) |
| Itemized deductions? | ❌ No | ✅ Yes (Schedule A) |
| Capital gains reporting? | ❌ No | ✅ Yes (Schedule D) |
| Best for… | Simple tax situations | All taxpayers, including business owners |
Form 1040 is now required for all taxpayers, allowing for broader financial reporting and deductions.
How to file taxes now without Form 1040EZ
✔ Use Form 1040 instead – The IRS now requires all taxpayers to file Form 1040.
✔ Determine if you need additional schedules – Business owners and freelancers may need Schedule C (business income) or Schedule D (capital gains).
✔ File electronically for faster processing – The IRS recommends e-filing Form 1040 for quicker refunds.
✔ Consider tax software or a CPA – Programs like TurboTax, QuickBooks, or a tax professional can simplify filing.
Example: A part-time worker previously using 1040EZ now files Form 1040 with standard deduction options.
About CoCountant
The discontinuation of Form 1040EZ means that filing taxes now requires detailed financial records—especially for business owners and freelancers. Without accurate bookkeeping throughout the year, correctly reporting income, expenses, deductions, and self-employment taxes on Form 1040 can be daunting and prone to errors.
At CoCountant, we simplify your tax filing process by providing comprehensive accounting and bookkeeping services. We help you organize your finances year-round, ensuring all income streams, deductible expenses, and tax obligations are accurately recorded and ready for seamless Form 1040 filing.
Our expert bookkeeping services enable you to:
- Clearly track self-employment income, business expenses, and deductions for accurate reporting on Schedule C.
- Keep detailed records of investment income and capital gains to simplify filing Schedule D.
- Stay organized for quarterly estimated tax payments to prevent surprises at tax time and avoid IRS penalties.
By keeping your financial records accurate and updated, we streamline your tax preparation, reduce your compliance risks, and help you maximize deductions—making the transition to Form 1040 effortless.
Want expert guidance on filing Form 1040 after the 1040EZ change?