When Should the Young Adult Become Concerned About Taxes?
As parents we try and arm our youngsters with as many skills as possible to carry them through their adult years and help them make sound financial decisions. One of the things that we may neglect to inform them about is the responsibility that they are going to have with their tax obligations.
When a young teen ventures out into the working world on a part time basis while still in school, they may get their first taste about having to pay taxes, at least in the short term. Depending on the number of weekly hours they are working, they may notice the payroll deductions that occur on their pay slips. This often comes as a shock to them that they have to give a portion of their hard earned money to the tax department.
Depending on the amount of money they make they may get a refund but to most teens they don’t like to look into the future, they want the money they earned in their hands now. This is a prime time to start some basic education about the Canada tax system and how it is something they are going to be dealing with for many years to come.
Actually by taking the time to discuss tax matters now when the young one is first being exposed to it, can help set the tone for how they will conduct themselves responsibly in respect to their tax obligations in future years.
If you adopt the attitude that taxes are unfair and you should avoid them whenever possible it can lead a young adult into thinking that they simply can avoid filing each year, which is going to lead them to a lot of problems with the CRA. It is well known that when a person becomes delinquent in their tax obligations it can be like a large snowball of financial debt that just keeps compounding interest and penalties.
The wiser approach would be first to discuss the importance of paying taxes and how this money is used. Although as seasoned adults we generally don’t trust the government’s proper use of our tax dollars you could incorporate a little Political lesson here explaining why this is one reason why your young adult should familiarize themselves with the political parties mandates when they become of voting age.
The next thing you want to point out is that utilizing the services of a good tax accountant will help them to get their taxes done right, and allow them to take advantage of all their potential tax credits. Also, that these experts are a great resource for creative tax planning. By doing all of this you have set a positive attitude towards Canada taxes for the young people in your life.