Talking taxes with Parker

You can't escape Uncle Sam.

Photo by The New York Public Library on Unsplash

On the final night of February, a leap year this year, I had my first real money talk with Parker about taxes.

It started because I wanted to show her a hilarious clip of a kid crying.

The boy in the video, who looks to be no older than 12, had lost his spirit. The board game Monopoly broke his will.

When a woman asks the boy where all his money went, he whimpers with an anguished, one-word answer.

“Taxes!” he shrieks.

You can’t watch the video without cracking up. You also feel for the poor child. Because chances are good that you’ve been in his shoes, whether in the game or in real life.

Parker has flirted with bankruptcy during our Monopoly nights but never because of taxes. Outside of the “pink tax” we learned about on the podcast Million Bazillion, taxes haven’t been a part of our money talks.

But the text above the video with the boy described the scene perfectly: “Teach them young.”

On that Thursday night six weeks ago, it was just the start of Parker’s education. She’s been curious about Uncle Sam lately. So I took a seat on her bed. About 20 minutes later, she’d gotten a good crash course on the basics of taxes.

After the clip of the kid crying, I went to YouTube. I pulled up a classic scene from “The Cosby Show.” Cliff Huxtable walks into his son Theo’s cluttered bedroom, takes a seat on the bed and gives him a tax lesson.

In an attempt to preempt a lecture on his poor grades, the teenage Theo professes they’re no problem because he’s not going to college. He wants a job like “regular people,” he says. A gas station attendant, maybe a bus driver. Theo then shares with his father how he’ll get by on little money and overcome taxes by lowering his cost of living.

The best part of the four-minute clip doubles as the most important. Cliff Huxtable delivers it after hearing enough of Theo’s plan to just get by in life.

“I’m going to give you $300 a week, $1,200 a month,” Cliff Huxtable says, using Monopoly money. “And I will take $350 for taxes. Yeah, because see, the government comes for the regular people first.”

Then I showed Parker what it looks like.

I downloaded my most recent paycheck. It was Parker’s first time seeing one.

I pointed her to all the pertinent information. The pay period’s begin and end dates in the upper righthand corner. I explained to her the difference between my gross pay and my net pay. Then I broke down the deductions, down to an explanation that deduction is only a synonym for subtraction.

I showed her the medical, dental and vision insurance, as well as my 401(k), under the before-tax heading. I explained my employee stock plan and the line that reads “support” under the after-tax heading.

“Jeez, you pay a lot of money,” Parker told me. “That’s, like, half your money.”

All told, it is half my income.

And just like that, Parker understood why I say my money has gone missing.

But I hope our money talk on taxes helps prepare her for the day she receives her first check with taxes withdrawn. Hopefully she understands how fast our earnings disappear, especially when we lack control over our spending.

When she finally reads “Rich Dad Poor Dad,” the chapter on taxes shouldn’t put her to sleep. It should make more sense to Parker now than if she read the book like she was supposed to last summer.

I’m learning too.

Despite procrastinating again on my taxes, I completed them Sunday without assistance. On Monday, confirmation emails arrived telling me both my federal and state returns were accepted.

With a side hustle operating as a business, stocks in various brokerages, multiple retirement and bank accounts, custodial accounts for Parker and, soon, real estate, my finances are as complex as they’ve ever been. I grew more uneasy than ever about filing my returns this year.

But I buckled down and did them. They only took me four hours. Last year took me 13 hours thanks in part to over-trading and needing to properly account for each of those trades to correct some sort of error.

Now, taxes don’t scare me like they used to. Suddenly, instead of shying away from our complex tax code, I’m growing a strange desire to dig in more.

It’s the only way I’ll grow.