Over the past couple of weeks, I have been writing about looking forward to next tax season and getting a hold on your situation while there is still time. This week, I wanted to change the focus a bit to those who may be paying taxes for the first time.
I first started thinking about this group because of this recent article, which discusses how some NCAA athletes may be receiving payments for the first time. We are still in the early stages of seeing how (and how much) these athletes are going to be paid, but I am sure the tax implications of what they receive are going to be a surprise for some. Ideally, their institutions would provide some guidance on this, but how much of it, how good it is, and how well people listen are certain to vary.
Now this may feel like a small group of people, and the high-profile ones certainly will be a limited batch. The amount of people who have to pay taxes for the first time each year, though, is still pretty vast. As we get older, paying taxes (and having them withheld from our paychecks) just becomes part of the process and many do not give it a second thought. I think many of us, though, can still remember when we were younger and had to enter that so very ‘adult’ world.
Traditionally, this was not necessarily a trying experience. You filled out a form when you got your first job, some amount of money was taken out of your pay, and then when it came tax filing, you found someone who could help you with that part of it. With more and more people making money in new ways, though, this can get complicated. After all, it’s not only the NCAA’s ‘real’ sports that come with payouts, others are making money in Esports, as well. Add in delivery drivers and other types of ever more available freelance work and you build a larger and larger group of younger people with a cloudier and cloudier tax picture than the one seen by previous generations.
Let this then be a call to not only give some thought to your tax picture as we approach the end of the year, but to also think if there are people in your life who may not have had to have these thoughts before. And if there are, give them a nudge to do so. For to them, those potential unpleasant surprises at filing time may be even more surprising if they didn’t appreciate that they were even possible.
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