It’s almost tax day, and while tax time can be a trying experience for adults, it can also be a prime learning opportunity for students to understand how taxes work and why we pay them. By taking an approach to teaching taxes that is enjoyable and stress free, when kids grow up to manage their own taxes, they won’t carry negative preconceptions they may have been inadvertently taught by their parents.
Many high school students are eager to land their first job in order to feel independent and self-sufficient–and of course, for the sheer joy of that first paycheck. Considering every employee who earns at least $600 annually will receive a W-2 (also known as wage and tax statement), high schoolers are likely already navigating the ins and outs of a W-2 form. While W-2’s can seem overwhelming initially, it’s simply a breakdown of earning over the last year, and the sooner students understand what to expect, the better. It’s important to teach these skills now, before they are stumped by a seemingly random document they receive in the mail come tax season.
Here are the W-2 basics high schoolers should know:
- Your W-2 form shows how much you earned which is known as your compensation, including wages and tips for the year.
- The document also details what you have paid in taxes throughout the year — both federal and state.
- In addition, it explains what was withheld from your pay, such as social security and medicare. It also shows how much you contributed to retirement and how much your employer paid for your health insurance.
- Your W-2 form may arrive by mail or electronically but it must be sent by your employer no later than January 31.
- When you are ready to complete your taxes, you will need this form and all its information. If you don’t file your taxes with the correct information, you can be subjected to fines and in some cases, possible jail time.
The following resources from the IRS, Econ Ed and Scholastic have access to tons of lessons and activities for teaching kids about tax season. They’ll learn about why we pay taxes, their importance and significance in society, as well as a brief history of taxes in our nation.
The Internal Revenue Service offers a website dedicated to educational content on understanding your taxes. “For Educators, every Understanding Taxes lesson includes the correlations to national and state educational standards,” IRS.gov states. “Each lesson plan includes a link to the applicable national and state standards, making it simple to integrate Understanding Taxes into your existing classroom curricula.” The site for teachers includes a custom resource list, as well as a number of lesson plans on the hows and whys of taxes, being a taxpayer, and tax history. Another site is dedicated specifically for students, and includes activities, tax tutorials and simulations.
This lesson plan from econedlink.org will assist students in identifying various taxes and the services they help governments provide. It pulls it’s resources from Treasury.gov to discuss the economics of taxation, and Irs.gov for tax history. It also incorporates a tic-tac-toe game to test students knowledge of taxes. The activity sheet asks: “what are the main goods and services of each level of government provides to its citizens?” and “where do governments get the money to pay for all these goods and services?”
This resource walks teachers through the essentials of teaching taxes on tax day, from simple explanations to what taxes are and the significance of April 15. Some printable activities include solving a maze, looking up tax vocabulary and filling out a crossword puzzle. Lesson plans are broken down between grades 3-5, 6-8, and 9-12. For grades 3-5, running a classroom economy plan is a great way for students to learn about credits, debits and banking. Students can perform classroom jobs to early daily salaries, budget and save money, and study economic trends.
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