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Multiple Jobs & Taxes
So for a while now I have been wanting to either get a 2nd job or completely switch jobs. I don't hate my current job but to keep this short -the facility I work at just keeps short changing the staff and in my field (nursing) this can be dangerous.
I want to get through the summer and past our mid September wedding before trying for an additional job. I would like to continue full time at my current job and then be part time or PRN at a separate job. Part of the reason I want to do this is to make xtra money for a house we want to buy a year or so from our wedding. The other reason is that I want to find out if this other job location would be better than my current.
What will have multiple taxes do to my income and taxes? Do I get taxed worse and essentially end up with less $?
I know a little but not much!
Thanks!
Re: Multiple Jobs & Taxes
How much you are taxed depends on your tax bracket. If by taking the second job, you jump up into the next tax bracket you will be taxed more. The tricky part is, that each job will assume you are supposed to be taxed at the lower tax bracket. To help withholding too little or too much change your withholdings on your W2. There is an excellent income tax calculator on the irs website that can help you figure out how many withholding to take.
Example- job 1= 30k/yr taxed at 15%
add in job 2= 10/yr. This will make your total income for the year 40k, bumping you into the 25% tax bracket.
The catch is that job #1 doesn't take into account your income from job #2 when they figure how much to withhold from your paycheck for taxes. So you will need to adjust both job withholdings to make sure you don't come up short at the end of the year.
I hope that helps and wasn't too confusing.
"Be the Lego Lady"
The best is to claim single zero at both jobs. Depending on how much your soon to be husband makes will also effect your taxes and income tax return.
My parents had a similar problem with my dad's consulting business on top of his work income and my mom's income. They ended up with everyone claiming single zero and if my dad did too much consulting they would pay quarterly taxes.
The first partial year you should see what you need to do for the following year to put your taxes where you want them.
Thanks for your responses! I figured it would mostly deal with tax brackets. I will look into the IRS website.
THANKS!
Others have given good advise about how to avoid having too little withheld for taxes, but I did want to clarify that no matter what you would not end up with less money. Even if having a 2nd job bumps you into a higher tax bracket, not all of the money you earn will be taxed at that higher rate, only the amount that is above your current tax rate.
For example, in 2013 incomes >$8,925 were taxed at 10% while incomes from 8,926-36,250 were taxed at 15%. So, if in your first job you earned $8,925 all your income would have been taxed at 10%. If you took on another job that brought your total income up to $10,000, the first $8,925 would still be taxed at 10% and only the $1,075 extra would be taxed at 15%. With just the first job you would take home $8032.50 after paying federal taxes. When you add in the 2nd job you would take home $8946.25. That still more even though some of your income was taxed at the higher rate.