Guest Post by FitMoney
As a parent of a teenager or young adult, you want to ensure that your child is financially secure and understands the importance of taxes. Filing taxes can often be confusing and intimidating, but it’s an important part of life when you start earning income. Once you know a few key concepts, filing your taxes doesn’t have to be so intimidating.
Teens and young adults need access to resources that explain the tax filing process in easy-to-understand language and walk them through their specific filing situation so they know exactly what needs to be done come tax time. Today, we’ll cover taxes from a young adult perspective and discuss how learning about this important financial component now can help prepare for future success.
Explain the basics of filing taxes and why it’s important for young adults
Filing taxes can seem daunting for young adults, but it’s an essential part of financial responsibility that shouldn’t be overlooked. Simply put, it’s a way for the government to ensure that they’re collecting the appropriate amount of money from individuals and businesses alike. When you file your taxes, you’re essentially reporting your income for the year and any applicable deductions you may have. It’s important to file because if you don’t, you could end up facing penalties. Additionally, filing can help you receive a refund if you overpaid taxes throughout the year. Even if you’re just beginning work, there could be money for you to claim.
Don’t let the tax season stress you out–it’s an opportunity to reflect on your own financial literacy throughout a calendar year.
Educate yourself on why and how we pay taxes
Sometimes the toughest part of filing taxes can be knowing where to start. Young adults need to learn if they should file, when to file, how to file, and what all those numbers across a paycheck mean.
Did you know that more income doesn’t necessarily mean a higher tax rate? It just means that only income over a certain amount will be taxed higher. What forms should you keep an eye out for in January? What can you do throughout the year to make paying your taxes easier? Sometimes, we’re left with more questions than answers, and these are just a few of the questions that are critical for building financial stability and health as your resume grows.
Knowing when and how to file
Knowing when and how to pay and file taxes is crucial to staying organized and on top of your responsibilities. It’s important to understand how you pay taxes throughout the year and when you need to file. This can depend on many factors including your job, income, or where you live. Secondly, figuring out how to file can seem overwhelming, but there are many resources available to help you navigate the process. Government websites or tax professionals can provide guidance and assist you in filling out necessary paperwork. Remember, filing taxes might seem overwhelming, but with a little research and support, you can successfully manage this responsibility – just don’t miss that Tax Day deadline!
Understanding your paycheck
A paycheck is an important part of understanding your taxes. Your paycheck outlines your gross pay, taxes deducted from your income, and the final amount of take home pay that you actually receive in cash or check form. The gross pay includes regular wages, any overtime wages. Also included on your paycheck are mandatory and optional deductions which are taken directly from your paycheck before the final amount of take home pay is calculated.
The look of your paycheck can often explain what forms to look out for at the start of tax season. Whether you’re receiving pay stubs from an employer or submitting invoices as a freelancer, it’s important to hold on to this important paperwork to keep track of what you owe and what you’ve paid. Once all deductions are included, the net amount of your paycheck is what you will receive as take home pay.
Tax season can be stressful, but it doesn’t have to be! All it takes is some time to know what to do and why you’re doing it. In just an hour, anyone can build confidence to not feel intimidated every time tax season comes around. It’s something we’ll do for the rest of our lives – so why not take the stress out of it?
