Updated: Feb 4, 2021
It's tax time and I am pumped! Not because of a refund or because I completed my taxes early this year (I did!!), but because this will be M's first year filing taxes to the MRS...Mommy Revenue Service.
Since June, she's been receiving a weekly allowance on two debit cards (Greenlight & GoHenry). Honestly, she's probably getting too much, but I don't really care.
It's been cool because, in the past six months I've definitely seen her start to make some better decisions about spending... but she's still a 10 year old, so there have been some awful decisions, too, lol. I was also super excited to see her decide to make charitable donations with her own money. My baby's got a big heart!
However, with this new responsibility comes....more responsibility, haha. My beloved child now has an income and she needs to pay taxes! (insert diabolical mom laugh here).
This also means that in order to earn credits to lessen her tax liability, she needs to put in some effort.
You see, the allowance comes whether or not she's completed her chores or been a jerk all week. I mean, yes, there are opportunities to earn money by doing extra chores and there are occasional threats of lost allowance to encourage attitude adjustment, but for the most part, she gets the allowance every week no matter what. I told her this is a win win situation for me because, either she works hard to be a contributing member to our household or I get some of my money back.
I figure this will also give her practice on reading and filling out forms which is an important skill that some young adults say they weren't taught in school. So if she learns a life skill from this, I suppose that's good too. Here's the basic set up: She is receiving her tax documents from me and will then use a Google Sheets (Excel but it's free) form to fill out her taxes and learn whether she owes or will receive a refund. She'll print this form and submit it to me to check for errors. There's an income sheet for each card. Money that she received as a gift or that she earned from doing odd jobs for other family members is tax exempt. Regular allowance and money that I offered for specific extra jobs around the house is not.
She is receiving a credit statement for volunteer work and charitable donations as well. I calculated it at $1 for every 10 hours and $10.
I also created a monthly credit. Basically there's a credit worth $5 each month that can award based on important things like chores and being a good family citizen. I also allow for bonuses to be assessed here. I don't know what I'd use them for, but who knows, maybe she'll write a novel or something and I'll feel like that's worth a bonus tax credit. I just like having options.
The last piece of documentation she'll need to complete her taxes are her report cards. Since we're going by calendar year, she'll need the two last trimesters from last school year and the first trimester from this year. She's in elementary school (5th grade) so they grade on a 1, 2, 3 and +, check, - system. While individual papers may have letter grades, report cards don't. It's strange, but whatever. Next year, I'll adjust the form for letter grades. I don't really do report card rewards because I want to emphasize that I appreciate her hard work, even if it doesn't result in straight As. As long as she does her best, I'm happy. I figured a small tax credit ( .30 for 3s and +s and .15 for 2s) wouldn't hurt though. I'm not gonna lie, I had a blast making the tax form. I used to love using Excel to make forms when I worked in an office, and apparently I've missed it. The the formulas and tax rate can only be altered by me, so all she has to do is fill in the numbers and it will handle the calculations.