How Does Having Multiple W-2s Affect Your Taxes?

••• bernardbodo/iStock/GettyImages

The amount of federal income tax you pay depends on your total income, which may be from one or more sources. If you have multiple W-2 Wage and Tax Statements that reflect your total income, you won’t be penalized with a higher tax liability than if you have only one W-2. However, having multiple W-2s may affect your taxes due to the withholding allowances you claim on them – prior to 2020.

Tips

  • Just because you have multiple W-2s doesn't mean you will be taxed any differently than those who have only had a single employer throughout the year. Collect all relevant W-2s and file your paperwork just as you would with only one W-2. Your tax rates will not be affected.

Multiple W-2 Forms from Different Employers

Employers must report the income they pay each employee and the amount they withhold on a Form W-2. If you worked for more than one employer during a tax year, you’ll have more than one W-2 form. You may have more than one job at the same time, or you may have changed jobs during the year. If you’re married and you file a joint return with your working spouse, the number of W-2s that you have collectively depends on how many employers both of you had during the tax year.

You transfer the information from the multiple W-2s to your tax return the same as you would if you had a single W-2, with one exception. If filing taxes with multiple W-2s, the amount you transfer is the total of all the W-2s. For example, if you file Form 1040 U.S. Individual Income Tax Return, add the amounts in Box 1 (Wages, tips, other compensation) on all your W-2s, and transfer the total to Line 7 on Form 1040 (Wages, salaries, tips, etc.). You can download the instructions for Form 1040 at IRS.gov.

If you have multiple W-2s for the tax-filing year, wait to file your return until you receive all your forms. Employers have until Jan. 31 to issue W-2s to their employees, so if your employer mails the forms, you may receive them on a staggered basis.

For example, you may receive one W-2 by mid-January, but you may not receive others until the first week of February, depending on when your employer mails the forms. If you are missing a W-2 by the end of the first week of February, contact your employer. If you still don’t have a W-2 by Feb. 15, call the IRS at (800) 829-1040, and a representative will contact your employer to request the missing form.

Understanding Pay-As-You-Go Taxation Policies

The IRS requires a pay-as-you-go tax. If you work for an employer who pays your wages or salary, the employer withholds amounts from your paycheck and sends the money to the IRS. If you have more than one job or a working spouse with whom you file taxes jointly, multiple W-2 allowances that you claim on each W-4 form may affect your taxes by resulting in your not paying enough taxes throughout the year. You may owe additional tax when you file your return.

Making Adjustments for Filing Taxes with Two Jobs

Form W-4 Employee’s Withholding Allowance Certificate used to be a worksheet that walked you through how to calculate how many allowances to claim so that your periodic withholding payments are sufficient to pay the annual tax that's due at the end of the year.

However, beginning in 2020, withholding allowances are no longer part of the form, part of an effort to increase transparency and accuracy in the withholding system. If you have multiple W-2s, the IRS recommends using only one W-4 worksheet instead of filling out a W-4 worksheet for each employer.

Tips

  • Beginning in 2020, withholding allowances have been removed from Form W-4, streamlining the process and simplifying the form.

2018 Tax Law Change

Whether you have one job or more than one, tax brackets are generally lower in the 2018 and 2019 tax years compared to 2017, meaning you may owe less in tax when you file your return. Generally speaking, the laws around working multiple jobs are the same. Make sure you understand the current year's tax rules when you go to file.