Two Earners & Multiple Jobs: W-4 Tax Form

Video Transcript

"Now we're going to look at the two earners multiple jobs worksheet. Remember we have James and Mary, and Mary has now started her second job in the family so we're going to use this and for line one it says enter the number from line one page one or from line ten above and in that case it's one. Then we're going to go to table one below that applies to the lowest paying job and enter a number here. Now in our example, James has a job that pays sixty thousand dollars, Mary has a job paying forty thousand dollars. So we're going to go to the lowest paying job, Mary filing jointly for forty thousand and we see in the category bracket, 38001 to 46000, that we want to enter seven on line two. So we enter seven on line two and we go to the instructions on line three. If line one is more than or equal to line two, subtract line two from line one. Well that's not the case in this, line two is more than line one. So if line one is less than line two, enter zero on form W4 line five. And since that's the case, we're going to enter zero on line five of our form W4. So change that to zero. We go back to our worksheet and we need to do some additional calculations here. It says complete lines four through nine to calculate the additional withholding amount necessary to avoid a year end tax bill. So enter the number from line two of this worksheet which was seven. On line five it says enter the number from line one of this worksheet which is one. Subtract line five from line four, that's six. Find the amount in table two below that applies to the highest paying job and enter it here. Well, on table two the highest paying job is sixty thousand and the amount we need to enter on line seven is five hundred and ten dollars. So we put that on line seven and next we're told to multiply line seven by line six and enter the result here. So five hundred and ten times six is three thousand and sixty. Then line nine tells us to divide line eight by the number of pay periods remaining in 2007. For example, divide by twenty-six if you are paid every two weeks and you complete this form in December, 2006. Well, we're starting this at the beginning of the year and we know that in Mary's case she's paid twice a month so we're going to divide the three thousand sixty by twenty-six and when we do that we get a hundred seventeen point six nine and we're told to, this is the additional amount to be withheld from each paycheck so this number is what we need to put on page, on line six of our W4 and we just put a hundred and eighteen dollars. And that completes this section for Mary. Now all Mary needs to do is sign her W4, same as James did, date it and return it to her employer who completes boxes eight, nine and ten."