Take a fresh look at your lifestyle.

How To File Your Taxes With Multiple W-2 Forms

0

[ad_1]

multiple w-2 forms

Research from the United States Census Bureau shows that at least 13 million people consistently hold more than one job at a time.

Add to that people who change jobs, or people who pick up part-time work during seasonal rushes, and you’ll find millions more people who have multiple W-2 forms.

Thankfully, the IRS has made it easy for busy workers to file their taxes, even if they have multiple W-2 forms. Here’s what you need to know about filing your taxes when you had two or more employers throughout the year.

How The IRS Views Your W-2 Income

Wages and salaries are income that you earn when working for an employer. It includes tips, bonuses, and your regular paycheck.

No matter how many employers you worked for during the year, the IRS views all wages and salaries as one bucket of income. It doesn’t care if you have 12 employers or if you earned $60,000 from one employer. The only thing that matters is your total wages and salary income.

Please note, income from wages and salaries (that is W-2 income) is not the same as business income, rental income, bank interest, dividends or capital gains income (to name a few of the myriad income sources).

Related: What’s The Difference Between A W-2 and W-4?

Why Taxpayers Get Multiple W-2 Forms

Anyone who works for multiple employers during the year will get multiple W-2 forms. Recent grads will often have a W-2 (or several) from their college jobs, and a second from their post-grad job.

Any year that you change jobs, you’ll get at least two W-2 forms. Add in side hustles or seasonal work, and you can quickly see the W-2 forms stacking up. Employers must legally report any income they pay to you (and withholdings) through a W-2 form.

How To File Your Taxes With Multiple W-2 Forms

Filing taxes with multiple W-2 forms is fairly easy. But you’ll want to follow a few tips to keep your filing streamlined.

  • Wait until you get all your forms. Don’t bother starting to file your income taxes until you have all your W-2 forms. Even if you’ve moved, you should get these forms in the mail by the beginning of February.
  • Reach out to employers if you didn’t get a form. Employers are legally obligated to provide W-2 forms to you. If you don’t get a form from an employer reach out to the HR department (or the business owner) to request your W-2 form.
  • Use tax software to file. Most major tax software packages support multiple W-2 forms. In fact, some software (such as H&R Block and TurboTax) offer easy-to-use apps specifically for W-2 filers that allow users to upload pictures of their W-2 forms.
  • Don’t forget deductions and credits. Your income may be simple, but you may qualify for deductions or tax credits. Make sure to find receipts for childcare, education forms (such as the 1098-T for education expenses or the 1098-E for student loan interest), or information about charitable gifts to make sure you are minimizing your tax burden.

Can I Use Free Tax Software With Multiple W-2s?

In general, people with multiple W-2 forms will still qualify for “truly free” state and federal filing. Most companies that advertise “Free W-2 income” or “Free basic 1040” filing will support multiple W-2 forms at the Free tier.

Last year, H&R Block offered free filing for multiple W-2 forms. And their free tier for 2020 also supported common education deductions and credits, childcare related credits, the Earned Income Tax Credit, and unemployment income.

Help, I Owe The IRS!

Employers typically withhold some money for taxes from each paycheck. However, people who hold multiple jobs at the same time may wind up accidentally “under-withholding” from their paychecks. To remedy the situation, you’ll need to take a few steps.

First, adjust your current withholdings. You don’t want to under pay taxes year after year. Anytime you have a life or income change, you’ll want to adjust your withholdings. When you take on a second job, you’ll want to adjust your W-4 to account for both jobs.

Next, make a plan to get out of tax debt. It may feel scary to owe back taxes to the IRS, but it is just like any other debt. And the IRS can be a very reasonable “creditor” as long as you make payments on your debt as agreed.

Hopefully, you’ll only owe a few hundred dollars or less. If that’s the case, a small emergency fund or a few weekends of side hustling may be enough to cover your tax liability. Otherwise, you may want to consider your loan options to pay back your tax debt.

[ad_2]

Source link

Leave A Reply

Your email address will not be published.