Seasonal Job

[TAG72]

I claim single with no dependents and I have a seasonal job as well as a full time job. How do I adjust my withholding on both W2's so that I do not have to pay again this year?

[ElizabethD7]

You can use the IRS Tax Withholding Estimator to estimate the extra amount you should withhold.  It considers your filing status, dependents and any other income.  Divide the amount among your remaining pay periods for the current year and note that amount on Form W-4 Line 4(c).  It will add to your Federal withholdings on your W-2.  If you have too much withheld, it will be refunded on your tax return.  You can make adjustments during the year if your income changes.

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[Emack_EA]

To adjust withholding on a full time job and a seasonal job W-2s, you need to treat the two jobs as a combined income source, even if one is temporary. if you don't adjust W-4 for your seasonal job, the IRS may underestimate your total income causing you to owe taxes and maybe penalties and interest for underpayment at the end of the year.

For the Full time job W-4:

1- use the IRS Tax Estimator

2 you need your most recent pay stubs from both jobs

3 info on any deductions like mortgage interest 

4 check the box for multiple jobs

5 use multiple jobs worksheet to calculate an extra withholding amount

6- enter additional withholding amount suggested by the IRS estimator from the worksheet. 

For the seasonal job:

1- Fill out the basic info such name SSN, Dependent etc..

2- in step 2 leave the box unchecked

3 don't claim dependents if you did on the first

4- add extra withholding, especially if this job has high pay in a short window

5- if your seasonal job doesn't withhold enough taxes, then you can add a flat amount to step 4 $100-$200 per paycheck depending on your total earning .

Please let me know if you would like further clarification. 

[TAG72]

It looks like I marked the multiple jobs box on my lower paying job instead of my higher paying job. How will this have effected my withholding for the year so far?

[ElizabethD7]

Your withholdings may be understated now.  You can recalculate and fill out new W-4s for the year.  The IRS Tax Withholding Estimator will take into account your year to date withholdings.  Remember to prorate your Line 4(c) additional withholding for your remaining pay periods.

[Emack_EA]

Marking the multiple jobs box on the W-4 for your lower-paying job instead of your higher paying-job can underestimate your total tax liability, resulting in too little tax withheld throughout the year- which could lead to:

1-Owing taxes when you file your return

2-Potential underpayment penalties and interest

3- Smaller paycheck adjustment now and larger tax bill later.

The form assumes the job where you checked the box is higher paying one and calculate the extra withholding accordingly. The IRS assumes you are earning more from that job than you actually are and your other job is less significant, so the higher paying job withholds at a lower rate and the lower job doesn't withhold enough either.