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Olga Estrada dedicated her life to raising her children. She was born in Nicaragua and joined her family in California more than 20 years ago to build a better life. Working in a data entry position, Olga didn’t have a lot of money but she always made ends meet.

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SETI Public Affairs

Nearly all microentrepreneurs start their businesses, by default, as “sole proprietors” and, because paying taxes as a business is mandated by law, the tax code serves as the near-universal portal for identifying and reaching nearly every new start-up business.  From a tax policy perspective, this means that the tax code’s Schedule C is a prime tool for delivering both federal and state tax credits and deductions to help start-up entrepreneurs succeed.

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A “Win-win-win” Strategy

• A “win” for new businesses (and their households) who need to “get their businesses right” with federal and state tax authorities in order to both grow properly and access valuable social safety nets and household wealth building opportunities that are driven exclusively through the tax code.
• A “win” for all taxpayers and the IRS which struggles every year with the fact that non-compliant self-employed filers are responsible for a big share of the “tax gap” (difference between taxes owed and taxes paid) which other taxpayers must make up.
• A “win” for the local communities which benefit from a thriving self-employed business sector that is committed to and pays taxes into the local economy.

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SETI’s Local Partners give us valuable insights into understanding how tax code practices and procedures impact small and growing businesses and help us both identify needed reforms in self-employment tax practices and craft new tax policies designed to help struggling small and growing small businesses.