For the first time in her life she was earning money. She got a job at a local restaurant. Having the extra spending money was fabulous, and she also started to save some of her income to put toward her postsecondary education.
Up until now, this has all been pretty straightforward. She went in for an interview at the restaurant and was hired. She learned how to do her job, figured out how to organize her time to accommodate school, friends, family and work shifts. And she experienced earning her own money to spend as she wished.
But now a new reality has hit. She needs to consider taxes. It's unlikely that she has learned much about income tax at school. According to Eileen Reppenhagen, CGA, what is covered in school is usually really, really basic. It's included in Math 10 and 11 Applications, Business Education 11 and 12, Accounting courses, Civic Studies 11, and Math Essentials 10 to 12. Topics include basic payroll, preparing a basic T4, and a basic T1. It's not enough, and her parents may also not be knowledgeable about her tax situation.
So where can Amanda go to learn about paying her taxes? Reppenhagen, an accountant who is also known as the "tax detective," has a program just for her. She believes that students should become tax-literate at school, and her website (www.taxdetective.ca) has information for teachers who are interested in looking at ways to teach tax to the students in their classes. She also has a program just for students like Amanda.
Her product is a student workbook on how to do Canadian tax using TurboTax Online. TurboTax Online is online software that is certified by the Canada Revenue Agency (CRA). There is also a downloadable version of TurboTax that you can install on a computer. Online means the data is stored in the "cloud" and is accessible via the Internet from any computer. This is what makes it such a great learning tool. And it's why her workbook shows teachers, parents and kids how to use it anonymously to learn, using case studies.
Reppenhagen's online program includes information such as sample tax returns. Students can access TurboTax Online for free, anonymously. They can use it in a computer lab at school, or save their work to finish it at home or at a library.
Stories are a wonderful way to learn anything. Tax is no different. To see what happens if and how the tax payable or refundable changes as a result, use the Student Workbook she's created for high school students. It's possible to create up to 20 free samples allowable when you're using TurboTax Online for free. There are five case studies to get you started.
All you need is a computer with an Internet connection and some imagination or a tax story to work on.
The point is, of course, that tax literacy is essential for everyone and yet we basically ignore it until we simply have to file a return.
On her website, Reppenhagan points out that tax is an essential life skill and yet our students just aren't learning it. With this lack of knowledge they could be leaving money (deductions) on the table. Learning about taxes also gives student a different way to consider life choices. If, for example, a student knew how much income they could expect from various occupations, and how much after-tax income would result, students might make very different life choices.
After I spoke to Reppenhagen, I wondered how young people are doing tax-wise in the next stage of their life. Patricia Lalonde, a money mentor who runs workshops (www.moneymentors.biz) focused on demystifying financial rhetoric, says, "Young People go to school to learn how to earn. Who teaches them how to manage the money they earn?" Her workshops teach fundamentals of tax rules, saving and investing now.
The point is that without some knowledge about income taxes, our young people are missing out on basic information they will need for their entire working life.
Kathy Lynn is a parenting expert who is a professional speaker and author of Who's In Charge Anyway? and But Nobody Told Me I'd Ever Have to Leave Home. If you want to read more, sign up for her informational newsletter at www.parentingtoday.ca.
