March 18, 2020
Depending on where you live in the U.S., there’s a good chance that little green sprouts are emerging outdoors while anxieties about tax season are emerging indoors. Taxes are one of many “money matters” that affect everyone. Sometimes seeking sound advice about taxes can seem like looking for a needle in a haystack. You can’t give tax advice to students or their families, of course, but there are ways you can help the families in your community improve their financial literacy. Here are a few things to think about.
No One’s Too Young to Learn About Money
Experts have recognized that financial literacy, or the lack thereof, has been a growing obstacle to success. This can be true for families at all socioeconomic levels. Luckily, this subject is being increasingly built into even elementary education. Y4Y has compiled a Financial Literacy Book List to offer interesting reading that will build students’ financial literacy. You can use tax season as an opportunity to help them understand where their parents’ hard-earned tax dollars are going, including the very books in their hands!
Thinking Ahead Is a Valuable Skill
A common mistake people make is to claim a high number of allowances on their W-4 withholdings form so they can enjoy more money in their paychecks. Some people end up owing a lot of taxes as a result, or incurring a fine. Maybe they’re not aware of this, or maybe they think they’ll be able to save up enough to pay their taxes once the holidays have passed, or that some other windfall will come along. Too many adults don’t fully understand how to sit down and write out a realistic family budget that takes the present and the future into account. Y4Y’s course on financial literacy can put your families on the right path for thinking ahead. You’ll want to assess what your families actually need, and Y4Y’s Adult Financial Literacy Needs Survey can help you.
Don’t Fall for Scams
Knowing who to trust is only half the battle during tax season. Knowing who NOT to trust is also key. The IRS has publicized many known scams that prey on the fears of honest taxpayers. These scams may be designed for identity theft or to extort money from the people who can least afford it.
Let Families Know About Free Tax Help
These cautionary tales paint a less-than-cheery picture around tax season, but there’s good news too! The IRS offers free volunteer tax preparation for families with low incomes, limited English or disabilities. The majority of families who use this service receive a refund, especially families in lower income brackets. Best of all: a large segment of lower-income families pay no federal income taxes.
You don’t have to be a tax expert or a financial whiz or a tax accountant to let families know about resources like the ones described here. By the time those little green sprouts turn into beautiful blooms, tax season will have come and gone, and everyone will be a little bit wiser!