At this time of year, as you gather your W-2s, 1099-MISC, and other tax forms, it’s a good idea to start talking to your kids about taxes. Once they’re past the toddler stage, the earlier they learn something about taxes, the better. Children as young as four or five can begin to understand the basic concepts.
If you explain to them what’s going on, kids often behave surprisingly well if you let them sit beside you while you prepare your annual tax return or take them along with you to an appointment with your tax preparer.
Here are a few things your kids should know about taxes:
1. Taxes are payments people have to make to the government so that government can keep running.
2. Taxes pay for things the government provides, like roads and bridges, the national parks, and the army, navy, air force, and marines.
3. Paying taxes is normal. Most adults pay taxes based on how much money they earned during the year.
4. Most people pay some taxes all year long, and then settle up with the government once a year. Settling up with the government is called ‘filing taxes’ or ‘filing a tax return’. In the United States, people are supposed file their tax returns by the month of April.
5. People fill out forms when they file their taxes. There can be lots of forms.
6. Someday your child will start filing taxes, too!
7. Taxes can take time to prepare and calculate correctly. As a grownup, you take taxes seriously, so you spend the time to get them right.