Eugene Severens
07-28-2007, 07:09 AM
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[being re-sent without the attachment since it exceed listserv limits]
I don't want to confuse the discussion about "grants," but 4.4 million low-income households receive refundable tax credits (averaging $1,700) for their self-employment income through the EITC program.* A refundable tax credit functions like a grant.*
*
Most people think of EITC as a program for low wage workers, but "earned income" includes microenterprise income too so long as you report your income on Schedule C or CEZ.* Start-up businesses who chose not to report and losing the refundable credit, and the credit is well in excess of any increased tax liability.* For those interested I have attached a 4-slide Powerpoint of "Maria" a recent immigrant*single mom with 2 kids who runs a day care center business.* This is real 2006 tax return to demonstrate the importance of the EITC for microenterprises.* Maria earns a net refundable credit ("grant") of over $3,000 for her business which is now fully "formalized" and contributing to the basic safety net of SS and Medicare.
Microenterprise tax preparation is an important product for start-up businesses.* The market is huge, annual, and mandated (roughly 11 million).* Most microbusinesses now get their tax prepared by for-profit tax preparation services and get short-term (taxday) financial advice at best, predatory loans at worse.*
*
A number of innovative EITC-VITA sites have recognized the importance of developing microenterprise tax prep to serve their customer bases.
*
CFED will be launching new webpages on this topic later in August for those who wnat more information. Or, contact me at gseverens@cfed.org (gseverens@cfed.org). (but I'm off*on vacation for 2 weeks, so won't be able to respond until week of Aug 13).
Gene Severens
CFED
Self-Employment Tax Initiative
*
Get a sneak peek of the all-new AOL.com (http://discover.aol.com/memed/aolcom30tour/?ncid=AOLAOF00020000000982).
This post transferred from the cdb-l mailing list
[being re-sent without the attachment since it exceed listserv limits]
I don't want to confuse the discussion about "grants," but 4.4 million low-income households receive refundable tax credits (averaging $1,700) for their self-employment income through the EITC program.* A refundable tax credit functions like a grant.*
*
Most people think of EITC as a program for low wage workers, but "earned income" includes microenterprise income too so long as you report your income on Schedule C or CEZ.* Start-up businesses who chose not to report and losing the refundable credit, and the credit is well in excess of any increased tax liability.* For those interested I have attached a 4-slide Powerpoint of "Maria" a recent immigrant*single mom with 2 kids who runs a day care center business.* This is real 2006 tax return to demonstrate the importance of the EITC for microenterprises.* Maria earns a net refundable credit ("grant") of over $3,000 for her business which is now fully "formalized" and contributing to the basic safety net of SS and Medicare.
Microenterprise tax preparation is an important product for start-up businesses.* The market is huge, annual, and mandated (roughly 11 million).* Most microbusinesses now get their tax prepared by for-profit tax preparation services and get short-term (taxday) financial advice at best, predatory loans at worse.*
*
A number of innovative EITC-VITA sites have recognized the importance of developing microenterprise tax prep to serve their customer bases.
*
CFED will be launching new webpages on this topic later in August for those who wnat more information. Or, contact me at gseverens@cfed.org (gseverens@cfed.org). (but I'm off*on vacation for 2 weeks, so won't be able to respond until week of Aug 13).
Gene Severens
CFED
Self-Employment Tax Initiative
*
Get a sneak peek of the all-new AOL.com (http://discover.aol.com/memed/aolcom30tour/?ncid=AOLAOF00020000000982).
This post transferred from the cdb-l mailing list