Schedule C Tax Preparation as Asset Building

1. Schedule C Tax Preparation as Asset Building Karen Heisler Rural Dynamics, Inc. Great Falls, Montana

2. Rural Dynamics’ SETI Project • Introduced in the 2009 Tax Season through the statewide Tax Help Montana program. • Focused on helping remote rural and Native self-employed filers access no-cost tax preparation services and useful wrap-around services in their communities.

3. Rural Dynamics’ SETI Project • During the 2010 tax season, the Tax Help Montana coalition filed over 6,000 tax returns statewide. • Over 320 Schedule C or Schedule C-EZ returns • 154 of these filers received an EITC • Some Native Communities had 5 – 10% of filers needing this service

4. Why does SETI matter in Montana? Why does SETI matter in Montana?

5. Montana’s Tribal Communities • Montana is home to 7 federally recognized Tribal Reservations. • Just over 6 percent of Montana’s total population is American Indian--around 60,000. • Reservation communities are, overall, remote and rural, often lacking general services.

6. Great Distances—Low Population • At 147,000 square miles, Montana is the fourth largest state in the Union. • With fewer than 1 million people, Montana is the 48thleast densely populated state. • 46 of Montana’s 56 counties are considered “frontier” with fewerthan 6 people per square mile. Many counties have 2 or fewer people per square mile.

7. What does that Mean? • In real terms: • Driving across Montana is the same distance as driving from WashingtonDCtoChicago Ill. • In Montana, there are: • 1.4 Elk, • 3.3 Deer, • 896 Fish, and • 6People • Per square mile.

8. According to CFED’s 2009-2010 Assets and Opportunity ScorecardMontana leads the nation in providing an economic incubator for entrepreneurs ranking: • 1st in small business ownership rates • 1st in microenterprise ownership rates • 3rd in women’s business ownership rates

9. Why SETI is needed in Montana • Traditionally underserved and historically offered few options with regards to financial education, taxpreparation, and business planning and development, remote rural and Native communities are lagging behind the rest of the state in terms of small business growth and development in Montana.

10. Why SETI is needed in Montana • CFED found Montana’s Indianpreneurs did not share in the state’s entrepreneurial vitality, ranking • 45th in American Indian business ownership rate. • It is important to keep in mind, the Native population in Montana is 6x the national average.

11. Rural Dynamics’s SETI Project and Tax Help Montana • During the 2010 tax season Tax Help Montana operated 38 full-time tax sites and over 25 tax clinics state-wide. • RDI offered specialized training to interested partners and volunteers covering Schedule C and Schedule C-EZ tax preparation. • On-site technical assistance offered throughout the tax season to Tax Help Montana partners.

12. Tax Help Montana’s 2010 Coverage

13. ABC’s of Rural Dynamics’ SETI Project • Provided no-cost tax preparation for smallbusinesseswith business incomeup to $50,000. • Returns were prepared by volunteerpreparerswho received additional training. • All self-employed returns were qualityreviewedby a staff member with a significant business tax preparation and financial background.

14. ABC’s of Rural Dynamics’ SETI Project • Specifically targeted self-employed filers in Reservation communities. • Linked SETI clients with additionalresources available within, or nearby, their community. • Additional follow-up by Rural Dynamics staff or site coordinators in the off season is scheduled

15. Rural Dynamics’ SETI Project • Capitalized on existing partnerships: • Montana Indian Business Alliance, the Montana Credit Unions for Community Development, Department of Revenue, and Tribal Colleges and Organizations. • Developednew relationships: • Made in Montana Marketplace, local Chambers of Commerce, SBDC, MT Dept. of Labor and Industry, Dept. of Commerce, and various associations.

16. SETI and Future Development • Utilizing SETI Schedule C tax preparation as an avenue to asset building and small business development will movecommunities to further economic vitality. • Working with establishedpartners, namely in Indian Country, provides credibility and the ability to increaseaccess to resource networks already existent in the community.

17. SETI as Asset Development Understanding that clients, especially our self-employed filers, need to be viewed holistically, Rural Dynamics’ SETI project links filers with additional resources, including: • Individual Development Accounts [IDAs] • Financial Education Courses • Business Networks [MIBA, State, etc.] • Business Planning Resources • Bridge to Benefits [work support programs] • Financial Resources [Accounts, Credit Counseling, etc.] • Alternative Products [Savings Bond, A-RAL, etc.]

18. How a Rural SETI Program can Work • Understanding that many filers did not identify as “self-employed” or understand simple tax terms or forms was key to gaining trust, especially in Native communities. • Outreach to self-employed filers through business networks, associations, and already trusted resources proved most effective. • Marketing in rural and Reservation communities often took a non-traditional form in its most successful incarnations.

19. Distance and Time Nature of SE businesses in rural America [ag versus retail] Marketing and Outreach Volunteer base comfortable with Schedule C “The Philanthropic Divide” New program component, establishing trust Remote population Training Challenges of Rural SETI

20. Advantages of Rural SETI • Tight-knit business networks • Passionate volunteer base • Community • Growing audience of SE filers • Grassroots support • Low-cost or no-cost word-of-mouth marketing • Opportunities for innovative approaches • Collaboration

21. Visit www.taxhelpmontana.orgfor more information on Rural Dynamics’ SETI program Karen Heisler karenh@cccsmt.org 406/454.5707