Teaching Tax Basics

Looking for ways to teach students about income taxes, deductions, etc.? Good news! There are tons of great resources out there to help you do just that. Let’s start by taking a look at two very important points related to teaching taxes:

1. What are taxes? Taxes are required payments to local and federal governments—businesses and US citizens alike. Though there are many forms of taxation, federal income taxes, state income taxes, and sales tax are some of the most commonly discussed.
2. How are taxes used? Tax revenue provides service for a variety of government programs: military, national defense, social & public security, health care, etc. In simpler terms, taxes are used to fund, improve, and maintain public infrastructure and services.

Taxes are considered one of the more difficult lessons for students to comprehend in a class setting. And it could just be the fact that the intricacies of the topic prove difficult for students to understand and grasp in a lecture-based lesson.

Here are some ways to help students experience the concept of income taxes first-hand:

Simulate a “Tax” System with a Token Economy:

Assign a pretend salary to each student based on age-appropriate classroom chores: tidying up personal or play areas, passing out assignments, acting as classroom monitor, watering class plants, etc.

Discuss the concept of taxes and explain that a portion of their “salary” needs to be set aside for taxes. As you go, help them calculate and set aside a percentage of that salary, simulating the tax deduction. The rest of the money can be used to buy small treats or rewards.

To expand on that, use that hypothetical tax money to “buy” something big for the entire classroom—e.g., decorate the classroom and throw a party at the end of the allotted time period—to indicate that taxes are used to fund and improve things for everyone.

Banzai: Advanced Budgeting Online Game:

Banzai offers financial literacy games for high school students who are learning to comprehend more in-depth money management concepts. Watch as your students navigate the complex process of earning a salary, deducting taxes, buying a house, and coping with the financial challenges of everyday life in this online interactive financial literacy course.

Take a Field Trip to a Local Government Office:

If it’s possible, visit a local government office so that students get an onsite experiential lesson that shows them how taxes support community services. You may even be able to arrange a quick chat with a representative and tour the building.

No matter how you decide to teach tax-focused financial literacy topics in your class, relying on outside resources could make all the difference when ensuring your students truly absorb the material. And when they do start to grasp the concepts you teach, you can rest assured that they’ll enter the job force prepared and understanding why a portion of their paycheck is taken, what happens with that money, as well as how to manage the rest of the income they keep.