Tax Time Can Be Opportunity Time for Low-Income Entrepreneurs
Relief is likely the dominant emotion felt today by tax payers racing to the post office to file those last minute returns. “Opportunity,” on the other hand, is not a word that typically comes to mind during tax season. For millions of low-income, self-employed individuals, however, tax time offers the ideal opportunity to grow their businesses, build assets and move up the economic ladder.<?xml:namespace prefix = o ns = “urn:schemas-microsoft-com:office:office” />
Programs such as the Self-Employment Tax Initiative (SETI), which was created by the Corporation for Enterprise Development (CFED), take advantage of the tax preparation process as a built-in, structured opportunity to reach out to low-income entrepreneurs and provide them with access to business development and asset-building services through free or low-cost tax preparation sites. SETI offers technical assistance and funding to community tax preparation providers and promotes tax policies that help these entrepreneurs grow their businesses.
Tax time is the ideal time to educate low-income business owners. The reason is simple: nearly every startup must formalize its existence through the tax filing process. Annually, roughly 15 percent of all U.S. taxpayers some 20 million people file a Schedule C return, which is used by sole proprietorships to report their earnings and expenses. Of those 20 million self-employed taxpayers, nearly 60 percent or 13 million earned less than $50,000 a year and could benefit enormously by saving money on tax assistance and accessing refundable tax credits.
Recognizing that efforts like SETI create jobs and boost the economy, Rep. Judy Chu (D-Calif.) recently introduced the Entrepreneur Startup Growth Act, which creates a grant program that would allow community-based organizations, credit unions and other service providers to expand these tax preparation and business development services for low-income self-employed individuals.
Out of the Spotlight (OOTS) hopes that the subject of low-income entrepreneurs gets Congressional attention on both sides of the aisle and fosters healthy debate about this critical segment of the economy. Nearly 10 million self-employed individuals approximately two-thirds of all self-employed people in the U.S. currently operate startups. These unincorporated businesses create an average of 3 million jobs per year through the formation of sole proprietorships. They are childcare providers, landscapers, graphic designers, caterers, pet sitters and home cleaners who, more often than not, are building opportunity for themselves when other steady employment is unavailable.
Nearly all net job creation in this country since 1980 has occurred in small business startups less than five years old. Providing them with the assistance they need to grow their businesses will help millions of people secure long term employment and allow families to move out of poverty. It۪s hard to imagine a better use of tax time.
Posted by Amy
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