Introduction to Taxes for Kids and Teens
This video explains the concept of taxes in a simple, concise way for kids and beginners. It could be used by kids & teens to learn about taxes, or used as a money & personal finance resource by parents and teachers as part of a Financial Literacy course or K-12 curriculum.
Suitable for students from grade levels:
- Elementary School
- Middle School
- High School
The topics covered are:
- What are taxes
- Different types of taxes
- Who pays tax
- Who receives the tax money
- How is the tax money used
- When are taxes due
What are taxes?
Taxes are mandatory fees that both individuals and companies have to pay to the government.
There are many different types of taxes that are paid on different things.
Taxes are the main source of income for the government and help fund projects that benefit the community.
What are the different types of taxes?
Some of the main types of taxes are Income Tax, Capital Gains Tax, Property Tax, and Sales Tax.
If you want to learn more about them, we cover each in detail in our playlist called “Taxes 101“.
Who pays taxes?
Both individuals and companies have to pay taxes on their income, profit, sales, property holdings, etc. above a certain threshold.
Taxes are mandatory and the tax rates applicable are defined by the law, so a company or individual cannot skip paying their taxes, and if they do, they face a penalty.
Who receives the tax money?
Depending on the type of tax, the tax money is collected by the federal, state or local government.
For example, property tax goes to the local government, but income tax goes to the federal and state governments.
What is the tax money used for?
Depending on the level of the government the tax is paid to, it is used to fund different things.
For example, tax paid to the local government is used to build schools and parks, but tax paid to the federal government is used to pay for things like social security, defense or government run health care programs.
When is tax paid?
Most types of taxes are due annually, but not all.
Sales tax, for instance, is paid by the buyer at the time of purchase.