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How To Help Your Teenager Understand Taxes

Teenagers tend to take life very literally. For example, when they get a job, a teenager expects to earn the exact amount they were offered. Life doesn't work that way, however, and you can assist your teenager in getting accustomed to it by helping them to understand the taxes.

Regardless of the amount of money you earn, everyone is charged income tax. By means of these taxes, the government is able to produce funds that provide beneficial services to citizens and finance military efforts.

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It is important for your teen to understand that an hourly wage is not an exact way to calculate their weekly income. Explaining how income taxes function will help them comprehend why their hourly wage can only provide an idea of how much they have earned during a day of work and that the number of hours they work multiplied by their hourly wage will not be the same number they will see on their paycheck.

When a teen gets a job, they will have to complete a tax form that they probably will not understand. Tax forms must be filled out properly because the government will use that information when determining how much and which taxes to take out of their paycheck. For these reasons, parents need to help their teens understand the details of tax forms and assist them as they fill them out.

Teaching teens about taxes from the very beginning of their working life will help them be prepared to handle this reality. Discuss with them the need to keep good track of the money they earn so that at the end of the year they will be able to determine whether or not the government requires that they file for taxes.