In a recent news release from the Bureau of Labor Statistics, I read that six and a half million of us (4.7% of the workforce) hold multiple jobs. Add to this number those who changed jobs for whatever reason, and we have quite a few who will find themselves with two or more W-2s and the confusion that may follow. If you’re one of the approximately 10 million people that file a tax return extension, we’re here to help you get over the reason many folks say they don’t file on time: w-2s! In fact, there is enough confusion on the subject that I suspect many readers who filed for an extension did it for just that reason, a bit of “poly-W-2-phobia.”
Fear not, if you use TurboTax, it’s as simple as going to to the “open form” icon, and scroll or search for W-2.
When you hit “open,” you’ll be able to view an existing W-2 you worked on or create a new one. There are two main issues with having W-2s from two jobs during the year. First, recall that the Social Security Wage Base (the amount of your income subject to FICA withholding) was $106,800. If your W-2 social security wages total more than this amount, you’ve overpaid and should look to your form 1040 line 69 to see that you are due a refund for the amount overpaid. Of course, if you are filling form out by hand, this is something to be aware of, anything you’ve paid in over $6,622 show be noted and refunded.
The other issue is whether the right level of federal taxes were withheld. If the two jobs were sequential, say one for 5 months, a layoff, and the next job for 5 or 6 months, you were likely withholding on the right pace, maybe even a bit too much as the amount withheld assumed a full 12 months employment. On the other hand, if one has two jobs concurrently, there’s a chance you under withheld as the tax bill on say, $60,000 is well more than twice the tax due on $30,000. Still, no need to panic, if you are in this situation, it’s time to pay the 2009 tax bill and quickly adjust your withholdings (via W4) so you’re not in the same boat next year.
Indeed, multiple W-2s add a layer of complexity to your return, don’t let it be enough to scare you off.