Tax Burden Higher for Bankrupt Businesses
BY Angus Loten
A study finds more small-business owners filing for bankruptcy owe tax debts.
More than half of all small-business owners filing for bankruptcy owe tax debts, compared to only a quarter of consumer filers, a new study shows.
According to the Small Business Administration's Office of Advocacy, small-business owners with higher tax debts who file for bankruptcy are generally in worse financial shape than those with low or no tax debts.
The study also found that bankrupt entrepreneurs tended to owe more taxes than bankrupt small-business entities. Owners in California and Texas were the most likely to report tax debts when filing for bankruptcy, while those in Tennessee reported the least, the study found.