My partner and I are planning on closing our S Corp. We own approx. $5,000 on sales taxes, corporate taxes, payroll taxes. What happens to those taxes if we file bankruptcy? What happens to us personally if we file bankruptcy?
The S Corp does not owe anybody else except the above tax.
Some taxes are dischargeable in bankruptcy while some are not. Here you and your partner would be obligated personally for sales taxes and some of the payroll taxes. You need to get with a tax and bankrutpcy attorney in your area before you do anything.
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Why would your corporation need to file bankruptcy if you don't owe anyone besides the taxes? Those taxes are usually not dischargeable, so filing bankruptcy wouldn't accomplish much. As always, check with a local bankruptcy attorney to find out what applies in your specific case.
Some taxes are discharged in bankruptcy and others are not. Sales taxes and payroll are fiduciary taxes and are assessed a trust fund recovery penalty if they are not paid making responsible parties (owners, check signers, return signers) personally liable for the taxes. These taxes are not discharged in a bankruptcy. You are typically not personally liable for corporate taxes. You should consult with a local bankruptcy attorney familiar with these matters to review your particular situation.
Any individual seeking legal advice for their own situation should retain their own legal counsel as this response provides information that is general in nature and not specific to any person's unique situation. Circular 230 Disclaimer - Advice given in this response cannot be used to eliminate penalties with the IRS or any other governmental agency.