I owed a lot last year because my secondary job was not withholding any federal or state taxes. I've used the IRS withholdings calculator and come to an amount per paycheck. I currently have it set up removing the money from my salaried job since my hourly job is variable and not ideal for tax withholdings.
Is it better to manually withhold the amount calculated from the IRS form from my primary job's W-4 and say "No" to the multiple jobs question on the form. Or, should I not manually withhold any money, but simply select "Yes" to the multiple jobs question on the W-4? It seems like when I do the latter option, the amount paid in taxes per paycheck is far too high.
I've tried a lot of options and not sure which is best. Thanks!
Getting that W4 just right is sometimes confusing not to mention frustrating. One thing to remember is at the end of the year your tax return is a combination of your year of income, no matter from what source. Having more money taken from your higher paying job like you are doing is okay but you want to make sure your hourly job is still withholding. You mentioned taking taking the extra income and marking Step two for multiple job. In this case they are taking more because you checked yes and taking the additional you have marked on Step 4(c) extra withholding. I would try just using the extra withholding. For job 2 I would just mark Step 2 yes for multiple jobs. W4 and take home pay 5 reasons to adjust your W4
Thank you for getting back to me!
Is it not redundant to have them withhold taxes from my secondary job by selecting "Yes" to multiple jobs on that W-4 in addition to manually withholding the amount on my primary job? Just want to make sure I am not double taxing myself by doing that?
Great question! Because your second job is hourly and income varies you do not want nothing withheld, even though you are withholding extra in your salaried job, it still may not be enough. The hourly job is the smaller of your two incomes. Checking the box will ensure something is withheld. You can try not checking the box but make sure there is even a minimal withholding for federal. If not you can go back anytime and adjust W4. I hope this clarifiies. I don't want you to owe at the end of the year.