W-4 tax form help wanted for part-time jobs

June 07, 2018 : Annelise Wiens

Working a part-time job to stay busy and make money isn’t meant to be as intense as landing a full-time, long-term job. But, the tax planning that goes into short-term and part-time jobs can actually be more complicated. That’s because the more jobs someone has during the year, the more likely they are to have the wrong amount of taxes taken out of their paychecks. This could mean a big tax refund (which maybe could have helped pay for expenses during the year if left in their paychecks) or a painful tax bill (which could have been minimized if spread out over their paychecks). Either way, taxes and surprises don’t really go well together.

Part-time job tax withholding complications for multiple jobs, low earners and entrepreneurs

To avoid tax surprises, workers should carefully fill out their W-4; the W-4 gives employers all the information they need to withhold the right amount of tax from their paychecks. Workers have to fill out a W-4 when they start a job, but they can update it at any time they want.

“The W-4 looks pretty simple. The section you give to your employer is less than half a page. But the devil’s in the details or more precisely, the worksheet you should fill out to figure out how many allowances you really need. The traditional ‘wisdom,’ that you just put down the number of people in your home, has never been the right way to do it,” said Jackie Perlman, principal tax research analyst at The Tax Institute at H&R Block. “Especially if you have multiple jobs, you need to think about the big picture.”

That’s because each W-4 for each job operates in isolation from the other. What one represents alone might be a totally different picture than the overall reality.

For example, a teacher who tutors part-time over the summer might make a fraction of his annual income from their tutoring job. But the tutoring company doesn’t know about the teacher’s primary job, or that his spouse also earns a full salary. For example, three allowances on $10,000 of income results in a different withholding amount than three allowances on $60,000 combined income. The teacher probably needs fewer allowances (which will result in more withholding) or to request an additional amount of withholding from his employer.

A different concern about inaccurate paycheck withholding affects kids whose only income is earned during the summer, but the same solution holds true. If their wages are low enough over a full year, they can fill out the W-4 to forego withholding entirely. If they did not have a tax liability in the previous year and do not expect to have a tax liability this year, they are exempt from withholding requirements. This could prevent them from needing to file a tax return at all to claim a refund of what they overpaid throughout the year.

“Preparing a tax return is a good opportunity to review your overall financial picture and make plans for the year ahead. But if you’re a kid without a requirement to file a tax return or pay taxes, you don’t want to be in a situation where you have to wait until tax season to get a refund of your money,” said Perlman.

For kids who are babysitting, lawn mowing, pet sitting or doing something else to make money on their own, there’s no W-4 to fill out. They’re the business owners with the responsibility to make quarterly estimated tax payments to the IRS, if they have an income tax or self-employment tax liability.

W-4 tax form help available with free online tools, tax pro appointments

Anyone starting a new job this summer, or anyone looking to update their W-4 with an existing employer, can use a free online W-4 calculator to estimate their refund or balance due based on changes to the W-4. Or, Perlman recommends they visit a tax professional to talk about their specific situation.

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Annelise Wiens

Annelise Wiens

Editor and Producer

As the newsroom editor, Annelise Wiens is interested in more than just tax and industry news, but the stories of H&R Block's 80,000 associates, their communities and H&R Block's world headquarters in Kansas City, Missouri. Wiens joined H&R Block in 2014 from a public relations agency, where she worked with clients in the financial services industry. Before that, she worked as a communicator for a senior member of the United States House of Representatives. She graduated from Biola University in La Mirada, CA with a bachelor's degree in history.

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