Working a second job is a great way to earn extra income, but it also comes with additional tax responsibilities. It’s important to understand how much tax you will need to pay on your second job, as well as the rules and regulations surrounding taxes on multiple sources of income. In this article, we’ll cover the basics of taxes on a second job, including how to calculate your tax liability and what forms you will need to file.
How is tax calculated on a second job?
When you work a second job, the income you earn from that job is subject to federal income tax, just like your primary job. The amount of tax you pay on your second job will depend on your total income and tax bracket.
Your total income is the sum of your income from your primary job and your second job. Tax brackets are based on your total income, not just your income from your second job. For example, if you earn $50,000 from your primary job and $20,000 from your second job, your total income is $70,000. Your tax bracket will be based on this $70,000, not just the $20,000 you earned from your second job.
Below is a table that shows the 2021 tax bracket for single filers and how much you will pay for each bracket.
| Taxable Income | Tax Rate |
|---|---|
| $0 – $9,950 | 10% |
| $9,951 – $40,525 | 12% |
| $40,526 – $86,375 | 22% |
| $86,376 – $164,925 | 24% |
| $164,926 – $209,425 | 32% |
| $209,426 – $523,600 | 35% |
| $523,601 or more | 37% |
It’s important to note that the above table is based on federal tax bracket and each state have different tax rules and rates, it’s best to consult with a tax professional or consult with the state’s department of revenue for more information.
How to report income from a second job on your tax return
When you work a second job, you will typically be issued a Form W-2 from your employer, just like with your primary job. This form will show the amount of income you earned and the taxes that were withheld. You will need to report this income on your federal income tax return. You will report your primary job’s income and second job’s income separately on your tax return.
It’s important to note that if you’re self-employed, you’ll need to file a Schedule C (Form 1040), Profit or Loss from Business with your tax return. The Schedule C is used to report income or loss from a business you operated or a profession you practiced as a sole proprietor.
Do I need to file a separate tax return for my second job?
No, you do not need to file a separate tax return for your second job. You will report the income from your second job on the same tax return as your primary job.
Will my second job affect my primary job’s taxes?
Yes, your second job income will affect the taxes you pay on your primary job. Your total income, including income from your second job, will determine your tax bracket and the amount of taxes you owe.
Is there a limit on how much I can earn from a second job before it affects my taxes?
There is no limit on how much you can earn from a second job before it affects your taxes. Your taxes will be based on your total income, regardless of how many jobs you have.