Recently, a friend asked me if I talk to my kids about April 15th - Tax Day.
And, truthfully, until this year, I hadn’t even thought to do it. If you know me, you might be a little surprised because I am always looking for teachable moments, especially those that are finance focused. But, like many parents, it’s easier to `just do tax prep’ and move on to managing the full plate that we as parents balance.
I’m pretty sure my tax prep has gone undetectable by my kids. Not on purpose but my husband and I stay relatively organized all year. I have a trusted accountant. Yet, I still find myself pulling together last-minute tax information which I usually have to do in snippets -- between business calls, meetings, making dinner. If they have noticed, I received zero questions from my kids like, why do we pay taxes? Do you have to pay tax? Do kids pay taxes?
Millions of Americans are paying taxes this month. And, one day, my kids will join the ranks and pay Uncle Sam. I remember when I got my first paycheck as a young adult, I was surprised (ok, shocked!) at how much came out for taxes. Never had anyone discussed taxes with me. Honestly, at 23 years old, I could barely understand what was printed on my paycheck. So, I’m stopping this here and now for my children.
This tax season, I will ask the questions (not wait for them!) and answer them thoughtfully, together. Here are a few questions/answers that I’ll use to start my family conversation:
Why do we pay taxes? Taxes cover expenses like, education, military, healthcare, government worker salaries, community resources and benefits, road and bridge repairs, libraries and parks. Can you give any examples of how tax dollars might be used in our town?
Do you have to pay taxes? Yes, if you are earning a certain amount of money.
Do kids pay taxes? Only if he or she makes a certain amount of money like, a lot of zeros. Can you think of a kid actor or actress that will likely be paying taxes this year?
I’m flipping this dull-ish topic into an interesting, forward thinking, financially smart family conversation. I want my children to see their first paycheck and be financially literate. So, thanks to my friend for bringing a critical topic to my attention; and YES, I now discuss Tax Day with my kids.
Do you talk to your kids about tax season? Tell us about it.