w2 and per diem

[wucool33]

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hey guys, what do you guys put on your w2 for per diem jobs. Should I put a "0" for w2 deduction if I have a full time position already?

 

[zelman]

I don't know the answer, but I believe you're asking about your w4 form, not W2.

 

[pezdispenser]

Yeah you mean W-4. I put 0 allowances plus an additional $50 for a ~$400-800 paycheck. You want the tax divided by the taxable income to be around the same as your total effective tax rate which is usually around 16-17%.

 

[aznkukuboi]

I put 2 on my second job and for some reason I'm still getting tons back on my returns. I claim 1 on my primary job.

 

[BidingMyTime]

I use the same number of exemptions for both, I never thought about using different ones.

 

[pezdispenser]

I use the same number of exemptions for both, I never thought about using different ones.

The reason is, say you earn $400 at a per diem job. $400 x 26 = $10,400 annually, so they will withhold taxes for that tax bracket which is only 10%. But in total, if you have a $120k primary job and add this $10,400 on top of that, you are well into the 24% tax bracket, and your average or effective tax rate might be around 16-17%. That's why I put 0 allowances + $50 at the per diem job to increase the taxes withheld closer to the 16-17% so that I won't owe any more taxes on this per diem income on my tax return.

 

[BidingMyTime]

The reason is, say you earn $400 at a per diem job. $400 x 26 = $10,400 annually, so they will withhold taxes for that tax bracket which is only 10%. But in total, if you have a $120k primary job and add this $10,400 on top of that, you are well into the 24% tax bracket, and your average or effective tax rate might be around 16-17%. That's why I put 0 allowances + $50 at the per diem job to increase the taxes withheld closer to the 16-17% so that I won't owe any more taxes on this per diem income on my tax return.

Ah that makes sense. It probably hasn't made that much difference for for me, because of the large number of children I have, they are great tax deductions.