Could you explain how to actually calculate this with an example? I'm trying to do this math myself but getting confused about where the bracket cutoffs are and how to determine the additional amount needed.

Sure! Let's use 2024 tax brackets for a single filer as an example. The 22% bracket goes from $44,726 to $95,375, and the 24% bracket is $95,376 to $182,100. If your first job pays $85,000, you're already in the 22% bracket. When you add $55,000 from the second job, your total is $140,000. So $95,375 - $85,000 = $10,375 of your second job income is still in the 22% bracket, and the remaining $44,625 is in the 24% bracket. The additional tax you'd owe is: $10,375 × 22% = $2,282.50, plus $44,625 × 24% = $10,710. Total extra tax of $12,992.50. If you're paid biweekly (26 paychecks), you'd need about $500 extra withheld per paycheck to cover this. You could either check the multiple jobs box on one W-4 or add an additional amount to Step 4(c).

I use it regularly and find it pretty accurate, but you definitely need your paystubs and last year's tax return handy. The key is entering the information exactly as requested. For the second job, you can enter the expected annual salary and $0 for withholding so far if you haven't started yet. The estimator will then tell you exactly what to put on each W-4. I've found it gets me within $100 of my actual tax bill every year.

Which states is it available in? I'm in Florida and would love to try this!

It's available in 12 states for 2024 filing season: Arizona, California, Florida, Massachusetts, Nevada, New Hampshire, New York, South Dakota, Tennessee, Texas, Washington, and Wyoming. They're planning to expand it next year if the pilot goes well. If you're in Florida, you're in luck! Definitely check it out. Super simple interface and you're filing directly with the IRS so no middleman taking a cut.

Are you sure H&R Block is still free for 401k stuff? I just tried them and they wanted to upgrade me to "Deluxe" for $55 when I entered my 1099-R.

Do you have a simple system for tracking expenses? I always mean to keep good records but end up with a shoebox full of receipts at tax time lol.

I use a combination of a dedicated credit card for all business purchases and a simple spreadsheet. The credit card gives me electronic records for most expenses, while the spreadsheet is for tracking mileage and cash purchases. There are also some good apps specifically for contractors that let you snap pictures of receipts on the go and categorize them immediately. Much better than the shoebox method! Even just taking photos of receipts with your phone and organizing them into folders by month is better than nothing.

This matches my experience too. The first year I paid way too much because I didn't track expenses well. Now I pay way less because I deduct everything legitimate. What tax software do you use? I've been using TurboSelf-Employed but wondering if there's something better for construction specifically.

That's a really smart idea, I didn't think of that! I just dug through my email and found an old contract with them that has their complete business information including what looks like an EIN. It's a 9-digit number that starts with 82, which I think is the right format for a business TIN?

Yes, that sounds exactly right! An EIN is a 9-digit number usually formatted as XX-XXXXXXX. If it starts with 82, that's almost certainly their EIN. Companies often include their EIN on contracts, official correspondence, and other business documents. You should be good to go now - just enter that number where your tax software asks for the payer's TIN. Problem solved without having to wait for them to call you back!

This isn't entirely accurate. While Secretary of State business searches are useful for verifying that a business exists and is properly registered, they typically don't include EINs in their public records due to privacy concerns. You can find the business name, address, registered agent, and sometimes officer names, but tax ID numbers are generally not publicly available through these searches.

What about if one spouse is self-employed with a Schedule C business and the other is W-2? Does that change the calculation at all?

In a self-employed and W-2 earner situation, filing jointly is usually still more advantageous. The self-employed spouse can still take all their business deductions on Schedule C regardless of filing status. When filing jointly, you might actually benefit more from certain deductions like the Qualified Business Income deduction, which can be affected by your combined household income. One scenario where separate filing might help is if the self-employed spouse has potential audit concerns or inconsistent income reporting that could create tax issues. In that case, the W-2 earner might want to file separately to avoid joint liability. But strictly from a tax savings perspective, joint filing typically results in a lower total tax bill even with a Schedule C business involved.

I've used it and it works pretty well. Just make sure you have your most recent paystubs and last year's tax return handy when you use it. The calculator will tell you exactly what to put on your W-4s. My husband and I both earn around $65k and we had to add about $80 additional withholding per paycheck each to break even.