Why This Strategy?
Small businesses provide economic security and stability for millions of American families. Creating and owning a business has long been heralded as the path to financial success and self-fulfillment in the United States, and for some, creating one’s own job – self-employment – is the best possible source of employment and income. In a nation clamoring for jobs, promoting and formalizing small startup businesses provides a viable solution.
Every business startup must pay business-related taxes. This makes the tax preparation process a built-in, structured opportunity to reach out to startup businesses and provide them with access to business development and asset-building services.
Providing free or affordable business tax preparation services to low-income self-employed individuals builds businesses and promotes asset building for low-income households. By paying an affordable fee, or no fee at all, to have their business taxes prepared by trained preparers, self-employed individuals can save money and ensure that they access all the tax credits for which they are eligible.
First, a desire to innovate.The microenterprise movement, which has served the self-employed community for over 20 years, was ready to learn more about how federal and state tax systems could be used to deliver direct support to micro-businesses.
- Second, a recognition that free tax preparation programs, which focus on helping low-wage households, were excellent partners. Many of these free tax preparation programs even had developed post-tax day self-employment tax training curriculum and had, in effect, become microenterprise training programs.
- Third, a hunger to expand our reach. While a small proportion (200,000 out of 10 million) of the total micro-business customer base applies for microloans or seeks microenterprise training programs, all 10 million must interface with the tax code. As a result, self-employment tax preparation is a tool for reaching this much larger customer base.
Download the SETI Fact Sheet, with more details about self-employment as a job creator and the SETI strategy.
Over the years, SETI has created several program related materials and reports based on data, interviews and lessons learned provided by community-based tax organizations. Click here to download any one of these publications.
Frequently Asked Questions
Visit the Glossary, full of terms you'll find throughout our materials. Here are a few core ideas:
- The terms “self-employed business” and “microenterprise” are used interchangeably on this website.
- The technical definition of a “self-employed business" is an unincorporated sole proprietor and a "microenterprise" (or microbusiness) is a business with five or fewer employees that works with $35,000 or less in start-up capital.
SETI gratefully acknowledges the support of our funders, including the Citi Foundation, Capital One Financial, Sam's Club, the Walmart Foundation, the Annie E. Casey Foundation, Morgan Stanley and Charles Schwab Bank.