Tips for talking to teens about personal income tax

Helping young adults understand their tax responsibilities is an important part of supporting their financial literacy. Find opportunities to talk to them about income tax using the following discussion tips:

We may not get to keep all the money that we earn. Personal income tax is usually deducted directly off our pay cheque.

  • Review their pay cheque with them. Discuss the different deductions, including personal income tax.
  • Discuss different types of income they may have to pay tax on, like full and part-time wages, tips, and selling goods or services online, as well as income they do not have to pay tax on, like scholarships and monetary gifts.

Everyone must file an Income Tax and Benefit Return each year they earn income.

  • Discuss different options available to file an Income Tax and Benefit Return (online, paper, professional tax preparer, free Canada Revenue Agency tax clinic, etc.).
  • At income tax time, engage them in the personal income tax filing process. Review resources available to help complete the income tax return.

Even if we do not earn income, filing an income tax return before we turn 19 can result in government payments to help with living expenses.

  • If you receive the Ontario Trillium Benefit, discuss the payments and explain the application process.
  • Discuss how credits and benefits apply to people at various stages of their life (e.g., students, seniors, etc.). 

Understanding the personal income tax system is an important part of managing financial resources responsibly.

  • Discuss how paying income taxes and receiving tax credits and benefits may impact their budget.
  • Discuss savings options like Tax-Free Savings Account (TFSAs), Registered Education Savings Plan (RESPs), and Registered Retirement Savings Plans (RRSPs). Take them to an appointment with a banking professional to learn more.

Related

What you need to know about Ontario’s personal income tax, tax credits and benefits.