Unemployment For Busted Entrepreneurs
.....If your business goes belly up, you might be entitled to some government funds.
.....Pink-slippers applying for unemployment insurance can hope to receive 30% to 60% of their salary from the past 12 to 18 months (up to their state's maximum allowance), and can collect that money for up to 26 weeks. But what about the safety net for busted small-business owners?
.....A business owner might choose to pay herself a salary to avoid paying stiff self-employment taxes on the company's profits. Or, she might prefer to eat that self-employment tax, for two reasons: 1) to avoid hiring a payroll service (necessary to prove to the IRS that she paid herself as an employee) and 2) to avoid the hassle of having to file the 940 and 941 tax forms as an employer of herself.
.....you figure it's better to close up shop for a few months while the economy turns around. Even if you've been paying into the system, you might not be eligible to collect unemployment insurance.
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