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Are Your Kids Ready to Learn About IRS Tax Liens?

Submitted by Tax Tiger on Fri, 10/2/2015 - 6:50 pm

Teaching your children the importance of taxes from a young age could help them avoid financial mistakes when they are older.

Jennifer Woods, a contributor on Forbes.com, said, “Most kids know the word but few understand what taxes are.” Children need to understand on their terms. You can’t just hand them a tax return to fill out and expect it to be perfect. Even adults make mistakes on tax returns.Young boy, counting money and taking notes

The way you build intelligent little taxpayers is by being creative. You don’t start off by talking to them about what an IRS tax lien is or how you can conduct an IRS tax lien search – that will go right over their head. Instead you can teach them the basics and then lead into what IRS tax liens are.

Start with the basics of sales tax because that is what they will be dealing with the most.

  • You pay taxes when you purchase items (candy, toys, books)
  • You pay taxes at work
  • You pay taxes on your home and business
  • You pay taxes on gifts (inheritance)

Once they know this, it is critical to emphasis how this taxed money goes to benefit everyone – such as pointing out a Fireman and how our taxes pay for him to save people.

Piggy bank tax jar

Children are like sponges. – They absorb information. The more understandable the information is to them, the quicker they absorb it. Help them learn by relating to their life. Try giving them a piggy bank and allowance to save money. Ask them if there is something they want to save up for and only take a small percentage away from their allowance. Over time they can purchase the item they wanted with the “taxes” you took out of their “income.”

Save them the disappointment

If children don’t understand taxes right now, they will be highly disappointed when they get older. For example, when they open their first paycheck, they may be disgruntled to know not all of the money they worked for is in it. By educating your children about the importance of taxes, you can help raise financially perceptive individuals.