Posted on: 11 June 2016
If your teenager has their first job, it is the best time to start helping them become financially responsible. Getting the first check ever can be exciting and the temptation for your child to spend their hard earned money can be difficult to resist. You want to help your child learn responsibility, including how much to save and why. During tax season, you want to make sure your child understands the tax process and files their taxes appropriately. Here are four reasons why you should take your child with you to your tax preparation expert.
You know that they filed
If your child has just got their first job and needs to prepare their first set of taxes, they may not be aware of how the tax process works. Gather together your child's W-2 or their last paycheck of that tax year so that they can get their taxes prepared along with you. Not filing taxes can have consequences, including financial penalties, so making sure your child learns to prepare their taxes each year will help their financial future.
Only one of you claims your teen
Parents are able to claim children under the age of 24 as dependents on taxes. If your child claims themselves, however, this can present an issue on taxes. If your teen claims themselves and you claim them in the same year, one or both of you may be audited and one of you will definitely owe back taxes. Make sure your child claims 0 exemptions on their taxes as a teen and understands why. Come to an agreement with your teen on when they should claim themselves and let them know how to set up exemptions and why later on.
They understand good preparation
If you tend to prepare ahead of time for taxes, either by paying quarterly or by putting aside a savings account specifically for taxes, your child should know about this. Learning to prepare for tax season is important, especially if you tend to owe money for taxes. Having to scramble to pay the bill or even having to put the balance of the credit bill on a credit card can lead to financial strain for a few months or longer. You want to teach your child to prepare for taxes well in advance of March or April, so taking them along with you to show them how prepared you were will instill financial responsibility. Contact a business, such as Balkcom Pearsall & Parrish CPA's PA, for more information.Share