Tax Filing Literacy in the 

Small Business and 

Enterprising Gig Ecosystem: 

Exploring Spatial SocioEconomic and Demographic 

Factors

BÁRBARA J. ROBLES & CAROLINE BRUCKNER 

OCTOBER 24-26, 2023 FCSM POLICY CONFERENCE 2023
Research Objective and Pain Points

What types of business sectors are affected?

Who are the small businesses, self-employed, 

independent contractors and gig workers in these sectors?

Where are they geographically and spatially located?

How are they managing their tax responsibilities and 

compliance obligations?

When and where does tax education occur?

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Small 

Business Tax 

Literacy 

Survey: 

Overview

Small Business Tax Literacy Survey was administered Sept 15, 

2022 to October 22, 2022 by PPSI (Public Private Strategies 

Institute)

Small Business Tax Literacy Survey was sent to approx. 90,000 small 

businesses, self-employed, independent contractors, freelancers and 

gig workers 

562 respondents completed the 20-question survey 

with a cumulative response rate of 0.12 percent

We employ n= (##) to indicate total number of responses per question

Average time to complete Tax Ed Survey: 10 minutes

Median time to complete Tax Ed Survey: 6 minutes

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Tax Education Survey

DEMOGRAPHICS AND SOCIAL-ECONOMIC FACTORS

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Over 66% of Respondents are between 40 and 69 years old

Over 66% of Respondents are between 40 and 69 years old

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66.9%

33.1%

Small Business and Gig Economy 

Tax Knowledge Survey (n=562): Demographics

Married/Living with Partner Not Married

45.7%

52.8%

1.4%

Small Business and Gig Economy 

Tax Knowledge Survey (n=562): Demographics

Female Male Other

FCSM POLICY CONFERENCE 2023 6
Race/Ethnicity (n=549) Male/Female

White 63.9% (n=351) 58.1% Male/ 41.9% 

Female

Black 22.8% (n=125) 38.4% Male/ 61.6% 

Female

Latino/a/x 4.6% (n=25) 56.0% Male/ 44.0% 

Female

Asian Amer 3.6% (n=20) 60.0% Male/ 40.0% 

Female

Native Amer 1.6 % (n= 9) 55.6% Male/ 33.3% 

Female

Other 3.5% (n = 19) 52.6% Male/ 42.1% 

Female

63.9%

22.8%

4.6%

3.6%

1.6%

3.5%

Small Business and Gig Economy 

Tax Knowledge Survey (n=549): Race and Ethnicity

White Black Latino/a/x Asian Amer Native Amer Other

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30.6%

69.0%

0.4%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

Yes No I don't know

TEQ2. Have you had a permanent job (35 hours a 

week or more with a single employer that gives 

you a W-2 tax form) in the last 6 months? n=562

18.1%

81.3%

0.5%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

Yes No Don't Know

TEQ3. Have you had a permanent part-time job (34 hours a 

week or less with a single employer that gives you a W-2 tax 

form) in the last 6 months? n=562

• Of the 18.1% (n=99) above, 58.6% (n=58) 

are female and 41.4% (n=41) are male

• Of the 30.6% (n=170) above, 50% (n=85) 

are female and 48.8% (n=83) are male

More Female than Male Respondents are in FT and PT 

employment while engaging in Entrepreneurial activities

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0.2%

6.1%

10.4%

7.0%

26.4%

35.2%

14.6%

0.2%

Less than High School

High School Diploma

Some College/University

Associate/Technical Degree

College/University Degree

Masters/Professional Degree

Doctorate Degree

Other

Small Business and Gig Economy 

Tax Knowledge Survey (n=560): 

Educational Attainment All Categories

23.8%

26.4%

49.8%

Small Business and Gig Economy Tax 

Knowledge Survey (n=560): 

Educational Attainment 3 Categories

Less than University

College/University Degree

Masters/Professional/Doctorate Degree

76% of Respondents had at least a 

college degree

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14.2% 15.3%

44.3%

26.1%

0

5

10

15

20

25

30

35

40

45

50

Northeast Midwest South West

Percent of Respondents by Geographical 

Regions (n=555) 

44% of Respondents reside in the South- 85% 

in metro and 1510% in non-metro areas

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Tax Education Survey

SURVEY QUESTIONS CAPTURING TAX KNOWLEDGE GAP

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Top-Line Findings Summary

It’s a Pay-to-Pay System: 87% of respondents hired someone or bought software to do their taxes.

A College Degree Doesn’t Guarantee You Know How to Do Your Taxes: 76% of our respondents had at least a 

college degree compared to 23.5%(*) of the U.S. population and only 13.5% learned how to do taxes in college. 

You’re On Your Own When It Comes to Taxes: 62% of respondents reported learning how to do taxes on their 

own and only 7.5% reported learning how to do taxes in high school. At the same time, more than half of the 

states require completion of a financial literacy course to graduate high school. 

People Don’t Know What’s Due When: Approximately one-third of respondents didn’t know whether they 

needed to pay quarterly-estimated taxes and a quarter didn’t know how to pay their taxes. While 54% of 

respondents did set aside money to pay taxes, 30% didn’t know and didn’t set aside money to pay taxes. 

Tax Time Triggers Anxiety: Over 37% of Respondents Felt Nervous/Scared or Bad about Filing Taxes. 

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3.2%

4.4%

34.3%

52.8%

1.6%

0.5%

3.0%

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0%

I file my taxes on paper and mail them (paper mail)

I file my taxes using the free IRS website/software

I file my taxes using software (TurboTax/Intuit, H&R Block,

QuickBooks, etc.)

I pay someone to do my taxes for me

I have a family member or friend do my taxes for me

I use a free tax filing site such as VITA/TCE/Military, municipal

government/public library, credit union, etc.

Other (please specify)

TEQ8. How do you file your taxes? n=562

It’s a Pay-To-Pay System: 87% of Respondents 

Pay Someone or Buy Software to File Their 

Taxes

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62% Reported 

Learned to Do 

their Taxes on 

Their Own and 

More than 25% 

Reported Not 

Knowing How to 

Do Their Taxes 

and Relied on 

their Preparer

7.5%

13.5%

17.6%

11.6%

10.5%

21.0%

62.1%

25.4%

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0%

High School

College/University

Parents/Family

Friends/Colleagues

At work

IRS website/video

On your own

Other (please specify)

TEQ14. Where did you learn how to do your taxes? 

(CHOOSE ALL THAT APPLY) (n=562)

62% Reported They 

Learned to Do their 

Taxes on Their Own 

and More than 25% 

Reported Not 

Knowing How to Do 

Their Taxes and Relied 

on their Preparer

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11.9%

13.2%

16.4%

12.3%

2.0%

14.8%

29.5%

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0%

Unsure of the process

Unsure if I paid estimated taxes the right way

Not knowing what qualifies as a deduction

Not having kept track of deductions (expense receipts)

Not having kept track of earnings (work-for-pay, tasks-forpay)

Afraid of IRS audit or questions

Other (please specify)

TEQ9. What most concerns you when you are filing any type of 1099 income on your taxes? 

(n=562)

Over 41% of Respondents were Concerned about: 

What Qualifies as a Deduction, Unsure of Paying 

Estimated Taxes and of the Process

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22.2%

8.9%

10.5%

8.0%

21.4%

3.0%

1.6%

49.3%

41.1%

26.0%

2.5%

15.1%

0.7%

0.9%

1.6%

3.1%

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0%

Full-Time Employee

Part-Time Employee

Freelancer

Gig Work/Side Jobs/Hustler/Opportunity Jobs

Contract Worker

On Call

Occasional Worker

Self Employed/Independent Consultant

Small Buss/Sole Proprietor

Partnership/LLC Owner

Student

Retiree

Non-Employed

Helper

Homemaker/Stay-at-Home Person

Other

TEQ1. How Do You Describe Yourself? 

(Choose All That Apply) n=562

Almost 50% of respondents identified as part of the Independent 

Workforce and 67% Identified as Small Business Owners

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4.1%

0.9%

1.8%

3.9%

6.6%

5.5%

8.2%

66.2%

1.6%

1.6%

0.0%

3.0%

2.3%

1.2%

0.0%

10.1%

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0%

Retail/restaurant/franchise/hotel

Housekeeping/Cleaning

Lawn Care/Landscaping

Personal Care Services (hair, nails, spa, yoga, etc.; dog walking or grooming,...

Construction/Handy-man

Hospital/Dental/EMS

School/Education/Tutoring/Music Lessons

Professional Services

Daycare/Childcare

Eldercare/Homecare

Renting your home or room(s)/Rental Income (for example through AirBnB,...

Farming/agriculture, animal, ranching, etc.

Factory/Manufacturing

Bank or insurance company

Specialty handicrafts manufacturer, small workshop, garage undertaking,...

Other (please specify)

TEQ5. What type of work do you do? 

(CHOOSE ALL THAT APPLY) n=562

Over 66% of Respondents Self-Identify as 

Offering Professional Services

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32.7%

12.1%

16.1%

35.9%

3.2%

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0%

All the time

Most of the time

Not often

Never (use referrals or word of

mouth or flyers)

Other

TEQ4a. How often do you use internet platforms, websites 

and/or apps (such as Uber, Etsy, Airbnb or TaskRabbit) to 

connect with customers and get work-for-pay/gigs on your 

computer, laptop, pad or smartphone? n=560

12.9%

8.2%

29.1%

41.8%

8.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

All the time Most of the

time

Not often Never (get

paid by check

or cash)

Other

TEQ4b. How often are you paid for your work (selling 

goods or services to customers or businesses) using 

payment apps (such as VENMO, Paypal, Zelle, CashApp, 

ApplePay, etc.)? n=560

Over 50% of Respondents Never or Not Often Use On-line 

Customer Connectivity and More than 70% Never or Not 

Often get Paid Digitally

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Almost half 

of all Work 

is Done 

From Home

47.3%

21.1%

0.5%

19.1%

2.0%

5.7%

4.3%

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% 50.0%

Work space inside or attached to home

Factory, office, workshop, shop, kiosk, hotel, restaurant, etc.

independent from home

Farm or agricultural plot

Home or workplace of customer/client/business

Construction site

No fixed location (mobile/car)

Other

TEQ4_Where do you mainly undertake your work? (n=560)

Almost half of all Work is Done From Home

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69.0%

46.6%

75.4%

18.7%

58.0%

8.9%

6.0%

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0%

Form 1040

W-2

1099-NEC (formerly 1099-MISC) or 1099-K

Schedule E

Schedule C

Schedule F

Other (please specify)

TEQ7. Do you include the following income tax forms when you file your taxes? 

(CHOOSE ALL THAT APPLY) n=561

Only 69% of Respondents Reported Filing 

a Form 1040 but over 75% Report 1099’s

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25.8%

18.5%

19.2%

36.5%

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0%

Good, I'm getting a refund

Bad, I know I'm going to owe money

Scared/Nervous, I'm not sure whether I owe

money or not

Other (please specify)

TEQ19. How do you feel about filing your taxes? 

(Choose one answer) n=562

Over 37% of Respondents Feel 

Scared/Nervous or Bad About Filing Taxes 

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6.2%

16.4%

2.3%

42.5%

9.8%

1.8%

16.0%

24.6%

44.5%

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% 50.0%

Parents/Family

Friends/Colleagues

At work

IRS website/video

SBA website

VITA site

Internet/Social Media (Google/Redditt/Facebook)

On your own

Other (please specify)

TEQ11. Where do you go for help or advice to learn about your taxes? 

(CHOOSE ALL THAT APPLY) n=562

TOPLINE FINDINGS: 

• 43% of respondents looked to 

the IRS website and materials 

for help filing taxes, but they 

also looked to social media 

(16%); friends/colleagues (16%) 

and even the SBA website (9.8%) 

• Almost 45% of Respondents 

answering “Other (please 

specify)” indicated that their tax 

preparer/accountant/CPA was 

their tax adviser/tutor

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26.0%

7.5%

18.1%

48.4%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

$0 $1-$99 $100-$249 Over $250

TEQ16. How much do you pay to have help with or have 

someone do your taxes? n=562

TOPLINE FINDINGS: 

• One-third of 

respondents pay 

less than $100 but 

two-thirds pay 

more than $100 

and almost half of 

our respondents 

paid more than 

$250 to help with 

their taxes

FCSM POLICY CONFERENCE 2023 23
Preliminary Logit Regression Results for Small Business, 

Independent Contractors, Freelancers and Gig Workers

• Request for SOI IRS proprietary Zip Code and County level data for 2022 is

pending

•Preliminary results from employing public IRS Zip Code level data for 2020 

provide suggestive results for various Adjusted Gross Income Tax Filers with 6 

categories of AGI 

•Results presented here are for AGI4: Adjusted Gross Income for $75,000 to under 

$100,000

•Odds Ratios indicate that Age and Education of respondents as well as Zip Codes 

with high levels of Paid Preparer Signatures on Taxes Filed with the IRS have a 

significant probability of Small Business, Independent Contractors, Consultants, 

Freelancers, and Gig Workers paying someone to prepare their taxes.

FCSM POLICY CONFERENCE 2023 24
AGI4: Small Business Tax Filers with Adjusted Gross Income between $75K and $100K

Source: Tax Literacy and Small Business Survey, 2022 and IRS Tax Statistics, Zip Code Level, 

https://www.irs.gov/statistics/soi-tax-statsFCSM POLICY CONFERENCE 2023 -individual-income-tax-statistics-2020-zip-code-data-soi 25
Preliminary Recommendations: 

Financial Literacy & Tax Education Outreach

• Tax literacy modules should be required to be (1) included in financial literacy and 

civics curricula/courses developed for SBA including those prepared and distributed 

among SBA/SBDC/WBC/SCORE organizations as well as Middle School, High School, 

Community and Technical Colleges and University programs; and (2) studied for 

long-term impact and outcome analysis. 

• VITA/Tax Counseling for the Elderly (TCE) sites should include awareness, education 

and basic information concerning 1099 forms (1099NEC and 1099K) by having links 

to resources on SBA/USDA websites and networks.

• Going forward, IRS/SBA/USDA should collaborate on funding and employing 

participatory research, tax awareness and education as a wholistic methodology for 

learning what type and level of tax literacy has the most significant impact on small 

business access to capital and facilitates compliance. 

FCSM POLICY CONFERENCE 2023 26
References 

Bruckner, Caroline (2016). Shortchanged: the tax compliance challenges of small business operators driving the on-demand 

platform economy. Available at SSRN 2784243.

Bruckner, Caroline & Jonathan Forman (2022). Women, Retirement, and the Growing Gig Workforce. GA STATE UNIVERSITY L. REV.

2 (2022). https://readingroom.law.gsu.edu/cgi/viewcontent.cgi?article=3125&context=gsulr.

Bruckner, Caroline, and Thomas Hungerford. 2019. Failure to Contribute: An Estimate of the Consequences of Non-and 

Underpayment of Self-Employment Taxes by Independent Contractors and On-Demand Workers. Working Paper 2019-1, Boston 

College Center for Retirement Research. https://crr.bc.edu/wp-content/uploads/2019/01/wp_2019-1.pdf.

Collins, Brett, Andrew Garin, Emilie Jackson, Dmitri Koustas, and Mark Payne. 2019. Is Gig Work Replacing Traditional 

Employment? Evidence from Two Decades of Tax Returns. Washington, DC: Internal Revenue Service. 

https://www.irs.gov/pub/irs-soi/19rpgigworkreplacingtraditionalemployment.pdf.

Independent Economy Council, (April 12, 2022), “State of Taxes in the Independent Economy,” 

https://www.independenteconomy.org/our-blog/state-of-taxes-in-the-independent-economy

MBO Partners, Happier, Healthier and Wealthier: State of Independence in American 2022, 

https://info.mbopartners.com/rs/mbo/images/MBO_2022_State_of_Independence_Research_Report.pdf.

Robles, Barbara, and Marysol McGee. 2016. Exploring Online and Offline Informal Work: Findings from the Enterprising and 

Informal Work Activities (EIWA) Survey. Finance and Economics Discussion Series 2016-089, Washington, DC: Board of 

Governors of the Federal Reserve System. https://www.federalreserve.gov/econresdata/feds/2016/files/2016089pap.pdf.

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