I’m quoted in the article from Wharton@High School on teens and taxes.
Here’s what I said about teenagers and taxes:
Some high schools are teaching students about taxes, but many teens are still very new to the topic, says Carol Topp, a Cincinnati accountant and author of the Micro Business for Teens series. “I help teens understand taxes,” she says, including introducing them to related terms like IRS, which stands for Internal Revenue Serivice, the U.S. government agency responsible for tax collection and tax law enforcement. “The IRS’s website “Understanding Taxes” also has several great simulations to explain federal income tax to a teenager.”
Topp warns young workers about job-related pay situations that seem to be sweet deals, but can ultimately cause them problems. “Be careful about a boss who tells you he or she will pay you in cash and ‘off the books,’” says Topp, referring to some businesses that don’t report their workers’ incomes to the government. “They may tell you this is a way for you to save on taxes, but [if the IRS] finds out, you could have to pay back any taxes that are due, along with stiff fines and penalties.”
Taxes are unavoidable — if you are earning income, you must inevitably share it with the government. “The IRS takes unreported income very seriously,” says Topp. “It assesses interest on the tax owed every month it is late. They may also add on a 20% penalty for failure to file a tax return. If the IRS suspects fraud, then they can penalize you up to 75% of the tax owed. [Teenagers should] stay away from unscrupulous bosses. If they will lie, cheat and steal from Uncle Sam, they will lie, cheat and steal from their employees, as well.”
Read the entire article here.
Carol Topp, CPA
