The best tax lesson you can pass on to the kids? Show by example. Let them sit in on a few minutes of your tax return preparation. Give them a look at what income can be considered a tax liability and how other wages can help them move closer to a bigger refund.
And perhaps give them a real-life lesson in how tax works by asking them to divide up their money like Uncle Sam would. Ask them if it's better to put aside a little "tax" for every dollar they earn or if they would prefer getting a big bill at the end of the year. Ask them for suggestions about things they might be able to get tax "breaks" on, just like Mom and Dad get a bit back from the government for having kids or buying a house.
Author's Note: 10 Helpful Tax Lessons for Kids
It seems silly — on the surface — to think that kids would want to learn about taxes, but give the young ones some credit. They might wonder why prices are different "as advertised" than they are when they're rung up on the register, for instance. While it might be a chore for you, taxes might seem downright interesting to someone who doesn't have to file a return every year.
- IRS. "Understanding Taxes." (Nov. 10, 2014) http://apps.irs.gov/app/understandingTaxes/
- Kids.gov. "Explaining Taxes to Students Lesson Plan (Grades 3–5)." US General Services Administration. Oct. 30, 2014. (Nov. 10, 2014) http://kids.usa.gov/teachers/lesson-plans/money/explaining-taxes-to-kids/index.shtml
- Massachusetts Historical Society. "The Boston Tea Party." 2008. (Nov. 10, 2014) http://www.masshist.org/revolution/teaparty.php
- Rueben, Kim and Yuri Shadunsky. "State and Local Tax Policy: How Do State and Local Income Taxes Work?" Brooking Institution. May 8, 2013. (Nov. 10, 2014) http://www.taxpolicycenter.org/briefing-book/state-local/specific/sales.cfm
- Tax Ranger. "Teaching Your Children About Taxes." Liberty Tax–Tax Ranger's Blog. Aug. 23, 2013. (Nov. 10, 2014) http://www.libertytax.com/taxlounge/blogs/tax-ranger/archive/2013/08/23/teaching-your-children-about-taxes-3969.aspx
- TurboTax. "Does Everyone Need to File an Income Tax Return?" Intuit. 2013. (Nov. 10, 2014) https://turbotax.intuit.com/tax-tools/tax-tips/IRS-Tax-Return/Does-Everyone-Need-to-File-an-Income-Tax-Return-/INF14399.html
- TurboTax. "Tax Exemptions and Deductions for Families." Intuit. 2013. (Nov. 12, 2014) https://turbotax.intuit.com/tax-tools/tax-tips/Family/Tax-Exemptions-and-Deductions-for-Families/INF12053.html
- White House. "Your 2013 Federal Taxpayer Receipt." United States Government. April 2014. (Nov. 10, 2014) http://www.whitehouse.gov/2013-taxreceipt
- Williams, Roberton and Yuri Shadunsky. "State and Local Tax Policy." Brookings Institution. May 7, 2013. (Nov. 10, 2014) http://www.taxpolicycenter.org/briefing-book/state-local/revenues/state_revenue.cfm
Many Americans don't think about their tax bills until the new year. But there are things you need to do before Dec. 31 if you want to pay less later.