For the past 15 years of my teaching career, I have felt it important to help my students understand income taxes, primarily because I have been teaching students who are getting their first jobs and have no previous experience in filling out employment paperwork, including IRS form W-4 Employee’s Withholding Allowance Certificate. The words dependent, withholding, allowances, and exemptions are foreign to them, yet an employer is expecting them to complete a W-4 independently.
Many of these students would either attempt to complete the form themselves, ask a parent for guidance, ask a friend who is already employed what he/she did, or turn to me. Some would let the employer complete the form and simply sign on the bottom with no knowledge of what that signature signified. And the follow up comment I would hear after the first paycheck was received was almost guaranteed to be “Why are they taking so much money out of my paycheck?”
In my role as a teacher, in this specific situation, it is important that I teach students about these vocabulary terms, help them complete their employment paperwork, and instruct them on their role as citizen taxpayers in our society.
It was very important for me to help them understand that taxes provide the means for a community to fund the creation of public schools, build libraries, create police and fire departments, provide military protection for national security, fund scientific research to cure diseases, and much more. These efforts will help them see that in order to provide these benefits to us, our government needs to collect money.
The government creates a proposed budget, just like individuals and companies do, in order to determine how much money they have to spend on various programs and services. And where does that proposed budget come from? From the anticipated income they receive each year based off employee and business taxes that will be collected. In other words, the tax revenue that is collected (Income) allows the federal government to plan where that money goes (Outlays).
By the time I finish teaching this lesson, my students understand the income tax process in our country much better, and they understand the benefits they receive as citizens. They begin to feel confident in completing their own W-4 form in the future. Most importantly, they understand their responsibility in paying income taxes. To me, these are all key concepts they have learned.
If you have ever struggled to understand the income tax system in the United States or want some resources to use in teaching your students or teens about taxes, use the Take Charge Today lesson titled Paying Your Income Taxes. It simplifies this complicated topic and will boost your confidence in explaining it to others.