Friday, April 15, 2016

Students feel 'unprepared' to file tax despite Financial Literacy

Juliana Discher | Staff Writer
W-2, W-4, 1040EZ–for a teenager struggling to file their own taxes, these terms can cause bouts of panic, frustration, and shivers.
April 15 is the traditional filing deadline for U.S. federal income tax returns every year. Teenagers don’t have to file taxes if they are a dependent of another taxpayer; however, they have to file if their investment income is over $1,000, if their earned income is greater than $6,100, or if taxes are withheld from their paycheck. This means for many high school students with part-time jobs, filing taxes is required.
Senior Mariam Saad tossed her W-2 form in the garbage when she got in the mail for the first time.
A W-2 reports annual wages and the amount an employer withheld to pay federal and state income, Social Security and Medicare taxes. Saad said she was unsure of what to do with the form.
“I didn’t remember anything from Financial Literacy, so I threw my W-2 away the first time,” Saad said. “The next year when I got my W-2 form, I went online on H&R Block, but it was still really confusing. It said I would only get $20 back as my refund so I just ignored it. It was all just a hassle.”
Financial Literacy teacher Carmen Scalfaro said that it’s unlikely for a teenager to be audited because they don’t make a lot of money. An audit is when the Internal Revenue Service examines your taxes more closely to verify that your income and deductions are accurate.
Scalfaro said Financial Literacy prepares students to file.
“We go through simulations where students fill out 1040EZ forms, which are perfect for teenagers who have part time jobs,” Scalfaro said. “Most teenagers will get refunds, but some do have to pay more in taxes, so it’s important for them to know how to fill them out. I like that the class is given to sophomores, but sophomore year, only about half of students have a job and by the time they’re juniors a lot more will be working. So it could be more real to them as juniors, however, I don’t think there is anything wrong with preparing students for something they will see in the very near future.”
Sophomore Spencer Hathaway who is currently enrolled in Financial Literacy said he thinks the class does a good job covering the basics of filing taxes, but could go more in depth.
“If you’re working for a company, you have to fill out a W-4 and Financial Literacy prepares you for that,” Hathaway said. “When you get an actual career and start making more money though, I don’t think the class covers it enough.”
There are different ways to file taxes besides doing it alone, such as online websites or hiring an accountant. Hoh said that the first time filing is confusing for everyone, but it becomes easier with experience.
“I took Financial Literacy, but by the time I had to fill out my taxes I had already forgotten how to do it,” Hoh said. “So instead I decided to use TurboTax, but even that was confusing. It tries to walk you through it but there were a lot of questions I didn’t know the answer to and had to consult my mom about.”
Many students resort to having their parents file their taxes for them or other outside help. Senior Joey Barto said it becomes more of the parent’s burden to help children fill out tax forms or to do it for them entirely.
“My dad and my grandpa do most of the taxes, but they wanted me to try to do it last year,” Barto said. “I was so lost; they threw random letters and numbers at me. I had no idea what they were talking about.”
Barto said he had difficulty retaining and using the tax information covered during his sophomore year in Financial Literacy. Barto said Financial Literacy should be a senior mandatory class in order to be beneficial for students.
“Financial Literacy is such a good idea for a class, but most people don’t remember anything from it,” Barto said. “It should be a senior only class. Sophomore year, unless you’re one of the older sophomores who has a job, you don’t realize how important the information is.”
See the Full Story: http://thecspn.com/?p=36524