You Must File Multiple Tax Returns if you Worked More than one Job – False
In most aspects of life, it is widely believed that keeping everything in one place will help keep you organized.
All of your recipes should be in one cookbook; all of your child’s toys should be in one toy chest; all of your holiday decorations should be in one box.
The same rule applies to filing tax returns.
The IRS requires taxpayers to file only one federal tax return, even if they worked multiple jobs throughout the tax filing year. However, you may be required to file multiple state returns depending on which states you earned income in.
Filing Deadlines to Keep in Mind
While the federal tax return is typically due by April 15th, state filing deadlines can vary. It’s essential to check the specific deadlines for each state you’re filing in, especially if they differ from the federal due date. This information is critical to ensure you file on time and avoid any late filing penalties.
When Do I Need to File a Tax Return?
If you made income within a tax filing year, you need to file a tax return by April 15th. Always declare all of the income you earned from any job.
Even if you worked multiple jobs in various categories (W-2 vs. 1099), you are still obligated to report it all on one tax return.
Complex Income Sources
For individuals who own businesses in multiple states, the filing process can get more complicated. You’ll need to file tax returns in every state where your business has a significant presence or nexus. This also includes any state where you have employees, property, or substantial sales.
Each state has its own rules defining what constitutes a nexus, so it’s wise to consult with a tax professional to understand your filing responsibilities.
What If I Didn’t Work, Do I Still Need to File A Tax Return?
Another common misconception is that if you didn’t work, you don’t have to file. This notion is not necessarily true. Several groups or categories of people may need to file a tax return even if they don’t work.
Typically, spouses that do not work need to file a joint return based on their spouse’s income. In the case of students, depending on their situation, they might have to file a return to record their income for financial aid purposes or grants and stipends.
If a person is unemployed and is receiving unemployment benefits, they will need to file a tax return. Additionally, they must pay taxes on their unemployment benefits regardless if they worked during that tax year.
What is the Minimum Income to File Tax Returns?
To be required to file taxes, you must make above the set minimum incomes for your age and marital status.
- Single and under the age of 65 – $12,400
- Single and older than 65 – $13,850
- Click here for more specifications
If you are self-employed and earned at least $400 in income, the IRS will require that you file a tax return.
How Do Multiple Jobs Affect Filing My Tax Returns?
To reiterate: you will only ever file one federal tax return. State tax returns are a different story – we’ll get to that later.
It can feel overwhelming when you have to report multiple sources of income. However, it doesn’t have to be. Below is a breakdown of how your jobs can affect your tax filing process.
You Worked Two Jobs but at Separate Times Within One Year
Let’s say you had one job at the beginning of the year and then switched to another halfway through the year. In this scenario, the only thing you need to look out for is a significant income jump between jobs.
To compensate for the income spike, determine how much taxes you need to withhold. You can estimate tax withholdings with this IRS resource.
You Worked Multiple Jobs at the Same Time
If you work more than one job during the year and are not the employer, your extra jobs could move you into a higher tax bracket.
To prevent yourself from paying higher taxes, try increasing how much taxes you withhold from your check. Again, you can calculate how much taxes to withhold from your check using this IRS resource.
You Are a Freelancer, Contractor, or Self-Employed
When you don’t have an employer taking out income on your taxes, it’s your responsibility to pay estimated taxes.
Estimated taxes are paid quarterly or monthly on Form 1040-ES. Self-employed workers, those who earn money from tips, and contractors must account for estimated taxes.
There are various types of taxable income: side jobs, unemployment compensation, and interest from investments.
Additional Tips When Filing Tax Returns
When you work multiple jobs, experts recommend filling out separate withholding forms for each job.
It is also encouraged that you claim allowances correctly to reduce the amount owed after filing your taxes.
Lastly, make sure you are filing all of your tax return forms correctly, particularly W-2s and 1099s which are notorious for having minor mistakes.
When Do You Need to File Multiple State Tax Returns?
When you file a state tax return, you may be required to file multiple tax returns, unlike a federal tax return. The determining factor is income and which state you earned that income.
Tracking Your Sources of Income
If you earn income in more than one state or are a business owner working in multiple states, you may need to file several returns for each respective state. The same rule applies if you live in one state but work in another, or acquire income from an out-of-state property.
Furthermore, if you or your spouse work in a different state other than the one you both live in – you might have to file another state tax return.
You must check with your local government or employer to see if your situation warrants filing multiple tax returns.
Moving to Another State and Tax Returns
The three critical factors of filing in a new state are: which states are involved, which state is considered the source of income, and state income tax reciprocity.
State by State Basis
States handle taxes and residency differently. Once you have moved, and before you file, make sure to check the residency rules for your new home state. Often, a state may consider you a full-year resident if you’re present in that state for at least 183 days.
If you rent out your home in your old state, you will likely have to file an income tax return in your old state of residence. Again, be sure to research the tax return rules for the two states involved with your move.
Sources of Income
After your move, you will most likely file a part-year resident return in both states. Keep in mind that income from interest, dividends, and pensions usually derive from your state of residence.
State Income Tax Reciprocity
State income tax reciprocity is when a taxpayer lives in one state but works in another, and the states involved agree to exempt the income earned by the nonresident.
State income tax reciprocity only works if an agreement exists between the two states in question and if your only income is wages. Your employer is obligated to provide you with the withholding exemption request forms for the nonresident state – don’t forget to ask for these.
Protect Yourself from Late and Misfiled Taxes
The IRS will not be moving the tax filing deadline this year. Be sure to file your taxes as soon as possible to ensure you get a tax refund.
However, if you have misfiled tax years or missed years entirely – reach out to TaxRise. Our professionals can get you protected from IRS collection tactics and file past tax years.
Learn how easy it is to qualify for tax savings.
