Taxes with Multiple Jobs

Top Five Tax Surprises with Multiple Jobs

Love it or hate it, taxes is part of life. However, taxes with multiple jobs is tricky, especially with high-paying jobs involving equity compensation like employee stock purchase programs (ESPPs), restricted stock units (RSUs), and Incentive Stock Options (ISOs) — all very common in tech. Now throw in some 1099 self-employed income, another common occurrence, the tax complexities add up. Whether you’re using an accountant or filing your own taxes, here are the top 5 surprises I learned from filing my taxes with multiple jobs while making over $500K for the very first time. Note: The IRS and tax regulations still operate in a one-employer-for-one-employee world, and hence why you’ll encounter some tax surprises while working two high-paying jobs at the same time.

“Nothing is certain except for death and taxes.”

Benjamin Franklin

#1 Have Excess Social Security Tax Withheld

Let’s start with the good news because, sadly, it’s all downhill from here. US tax laws cap social security contributions at the individual level, which means with two jobs you’ll be double-paying on social security — assuming both your jobs exceed the income limit of $137,700 for 2020. To put it in another way, you’ll pay the max social security contribution of $8,537.40 per W-2, and there’s no way to tell the other employer to exempt you from social security tax withholding. Bottom line: You’ll get the excess social security back as a tax credit back when you file your tax returns.

If you’ve entered your W-2s correctly into any tax filing software, the excess social security tax will automatically get calculated and shown on Schedule 3, Part II, Line 10. No further action required on your part other than tracking your anticipating excess social security tax credits per W-2. For example, if you worked three jobs over a tax year each paid over $137,700 in gross income, then you’d anticipate excess social security tax credit for 2020 is $17,074.80. This is because the other two W-2s will be withholding up to the max social security liability ($8,537.40 x 2) since withholding is mandatory by the IRS.

Tax2019 Limit2020 Limit2021 Limit
Social Security gross income$132,900.00$137,700.00$142,980
Social Security liability$8,239.80$8,537.40$8,864.76
Medicare gross incomeNo limitNo limitNo limit
Medicare liabilityNo limitNo limitNo limit
Note: Social Security gross income limit increases each year.

#2 Likely Pay Additional Medicare Tax

Similar to social security, those making over $200,000 to $250,000 (single and married jointly, respectively) will need to pay an additional 0.9% of Medicare tax. The IRS requires your employer to withhold additional Medicare tax once your W-2 wage hits over $200K. Here’s the bad news: you can’t be exempted from this withholding and if you’re doubly employed then neither employer will know you’re already over your threshold amount so you’ll owe 0.9% of total gross income over $200K. Let me play out a couple of scenarios for illustrative purpose:

Scenario 1: You made $200K in W-2 wage in each of your two jobs

Let’s say you made exactly $200K per year in each job, then no additional Medicare tax will be withheld by your employers since each in their own eyes did not you did not hit the IRS threshold amount ($200K) requiring additional Medicare tax withholding. It’ll be up to you to pay the additional Medical tax through quarterly estimated payments, which is about $1,800 you’ll have to spread out over four quarters (derived from applying 0.9% tax to the extra $200K job).

Scenario 2: You made $150K in W-2 wage in each of your two jobs, and your spouse made $250K in her one job

Out of the $550K in total family W-2 incomes, only $50K got taxed for the 0.9% additional Medicare tax. Guess whose? Yep, it’s your spouse’s W-2 because in that job they hit the IRS limit of $200K at the individual level so her employer is obligated by law to start withholding the additional 0.9% in Medicare tax. So let’s set that $50K that got taxed the additional 0.9% aside. For the remainder $500K in W-2 incomes you both made, you can subtract the threshold amount of $250K for married filing jointly, leaving you with $250K still needing to pay the 0.9% additional Medicare tax, which is $2,250. Confused yet? Keep reading.

Filing StatusThreshold Amount
Married filing jointly$250,000
Married filing separate$125,000
Head of household (with qualifying person)$200,000
Qualifying widow(er) with dependent child$200,000
Note: Unlike the Social Security gross income limit which gets cost of living adjustment each year, the threshold amount is fixed.

The good news is 0.9% is a really small marginal increase, and you can offset it from the anticipated excess social security tax windfall you’ll get in 2021 which is $8,864.76. You’ll have to guesstimate the additional Medicare tax you’ll owe when filing taxes with multiple jobs. Either deduct what you owe from the excess social security tax or pay what you owe over four quarters of estimated payments. Here’s the IRS Q&A page for the curious. For the tax year 2020, the additional Medicare tax is captured on Form 8959.

#3 Likely Pay A Net Investment Income Tax

The Net Investment Income Tax, or NIIT, is really bad news for tech’s equity compensation. This tax applies to short and long-term capital gains when your gross income (which includes your investment incomes) exceeds the threshold amount with respect to filing status. This was Congress’s way of taxing investments to pay for the Affordable Care Act (ACA) after a certain level of income. However, I personally do not like the permanently fixed nature of the threshold amount, as well as how it disproportionately impacts families with a mix of W-2 and investment incomes. Here’s the IRS Q&A page for the curious. For the tax year 2020, the additional Medicare tax is captured on Form 8959.

The key takeaway here you, and solely you, are responsible for paying both your capital gains taxes and the additional 3.8% NIIT when your gross income is over the NIIT threshold amount. Estimated payments can be made on the IRS online payments portal.

Filing StatusThreshold Amount
Married filing jointly$250,000
Married filing separately$125,000
Head of household (with qualifying person)$200,000
Qualifying widow(er) with dependent child$250,000
Notice the only difference from the additional Medicare tax threshold amount is a qualifying widow(er) gets an extra $50. Again, these threshold amounts are fixed in perpetuity.

The good news is if you sell your primary home, the capital gains are still exempted from NIIT (up to 250K for single and 500K for married). However, once you’re over the exempted amount, NIIT will apply when you’re over the NIIT threshold amount. The takeaway here for the two-job hustler is if you sell your stocks, prepare to pay an additional 3.8% of taxes on top of the usual short and long-term capital gains tax. But watch out for the threshold below for long-term capital gains since it jumps to 20% and with the NIIT you’re looking at 23.8% all-in for Federal and another 9.3% or 10.3% for California.

Long-Term Capital Gains Tax RateSingle Filers (Taxable Income)Married Filing Jointly
20%Over $441,550Over $496,600
Selling your long-held tech stocks while a resident of California? Get ready to pay federal and state combined 33.1% tax rate.

#4 Likely Lose Income-Based Tax Deductions or Credits

Got kids or student loans? While we can’t cover everything, we’ll touch briefly on these two common income-based ones. Here’s the official list of deductions and credits from the IRS, though not all are income-based. For the curious, reading Investopedia’s tax deductions and credits guide — it’s much easier to understand than the IRS. Below we’ll focus on income-based deductions and credits because your 2x income now will start affecting your taxes since your reliance on deductions and credits to lower your tax obligations will no longer hold. Hint: you’ll likely not get the $2,000 child tax credit per kid for 2020 or $3,000 to $3,600 for 2021.

Child Tax Credits

Best of all tax credits — the proverbial subsidizing-parents-of-future-taxpayers. I’ve benefited from this tax credit, albeit only very briefly. As more people delay having kids until they earn more, I suspect in the future there will be more cross-subsidization from well-to-do to less well-to-do parents. Is that fair? I think so. Studies have shown the well-to-do kids will earn more and wealth persists generationally. That said, if you make over $400K, this credit will start to scale down until it becomes zero at $480K. For the doubly employed, you’ll most likely be out of pocket and can’t count on getting this tax credit. For 2021, the child tax credit becomes even more complicated with the American Rescue Plan Act, so we won’t get into it here. You can read more about the Child Tax Credit for 2020 and 2021 here.

Student Loans Interest Deduction

While a $2,500 deduction (not even a tax credit) is a small potato for high double earners, it is still something. Unfortunately, there’s income eligibility to claim this deduction. For the Overemployed, you’ll lose this deduction because the income limit when the phase-out starts is $70K for single and $140K for married filing jointly. You can learn more about student loan interest deduction here.

#5 You Can’t Rely On IRS W-4 Calculator To Be Accurate

Let me just put it simply — the re-worked W-4 is just plain-o confusing! Instead, use the Turbotax W-4 calculator, and then enter the final numbers into your employer’s W-4 form. Even then, you’d need to guesstimate your credits and deductions accurately, as well as other incomes like rental income, investments, or ad hoc consulting and self-employment. If you have lumpy incomes like a big bonus or selling RSUs, then these calculators won’t work as well.

Try your best to get your W-4 and withholdings accurate, but chances are, because of tax surprises #1 through #4, you’ll need to do some manual calculations are the end of each quarter and potentially make extra tax payments through the IRS online payments portal. You can use the tax table below directionally to see if you’re on track to meet your federal tax obligations by end of 2021. This alone, however, doesn’t account for tax surprises #1 through #4.

2021 Federal Tax Table For Married Fiing Jointly

Tax RateTaxable Gross IncomeTax Contribution
10%$19,900 and below$1,990 (10% x $19,900)
12%$81,050$7,338 (12% x $81,050 – $19,900)
22%$172,750$20,174 (22% x $172,750 – $81,050)
24%$329,850$37,704 (24% x $329,850 – $172,750)
32%$418,850$28,480 (32% x $418,850 – $329,850)
35%$628,299 and less$73,308 (35% x $628,300 – $418,850)
37%$628,300 and more*A really big af number
*For every dollar you make above $628,300, you’ll be paying 37 cents on that dollar.

For State taxes, you can repeat the tax contribution calculation above using the table from Tax Foundation. Welcome to the life of working two remote jobs at once — taxes with multiple jobs is complicated. Uncle Sam treats capitalists and laborers very differently, so write to your Congressmen if you’re not happy with why they came up with seemingly arbitrary numbers and trigger points for income-based deductions and credits. Meanwhile, once you’ve taxes figured out, just keep your head down and earn more — it’s worth it. Like in investing, taxes are obligatory but yet secondary concerns. If you don’t make any money, there isn’t much to tax you on.

Shocked? Let Us Know Your Thoughts

For other tax-related investing issues, such as 401(k)s and backdoor IRA (the high-income way to contribute to a Roth IRA), I’ll be writing more about it under Money Matters. Meanwhile, here’s a short 1-minute video recap on taxes with multiple jobs:


  1. In the “ 2021 Federal Tax Table For Married Fiing Jointly” table, the Tax Contribution amount steadily increases with each increase in tax bracket except between the 24% ($37,704) and 32% ($28,480) categories.
    Why is that? Are the tax figures switched on accident?
    Just curious.

  2. I am dipping my toes in the multiple remote jobs trend. Just interviewing, but it looks it will go good and I will get 2 remote jobs that I wish. Problem is that currently I am working a full time, that will soon ask me to come back to office. If I get the 2 remote jobs, I am planning to quit my current gigs. In order to get the remote jobs (both full time) I have told that I am working in a contract job, that can be ended at any time. Is there a way the new jobs can discover I am working a salaried full time during the background check? Will my current employer discover it? I don’t want to quit my job until being sure I can get the 2 remote jobs I wish for. I live in Texas, one of the prospective employers is in NJ and the other one is in California.

    1. I may be wrong, but if there is a background check, I don’t think your full salaried job details would come up on the check; not unless you don’t plan on listing it.
      Also, I would suggest you not quit the full-time job, until you get the other remote gigs, you know, a bird in hand….
      FYI, I have been working 3 remote gigs just before the pandemic forced everyone remote. 🙂

  3. Guys, if my J1 and J2 have the same Medical/Health Insurance (Canada Life) will there be a conflict of anything? I will get them after 3 months on both jobs. Thank you

    1. Insurance should be opt-in or out. Choose to opt-out for one employer, reason could be that your spouse has one. In general, insurance companies will assign you a contract number, you can have 2 with the same insurance company, related to 2 diff employers. I have had 2 coverage number for 2 employers under one Insurance company. Also try to be contractor vs full-time.

  4. I work 3 jobs and, of course, they don’t know. Can the CPA tell the employer that information? I kinda want to hire a CPA to do my taxes, but I’m a bit nervous about that. Thoughts?

  5. Just took a new job and it clearly states can not be employed or a consultant by another company…looks like they are trying to catch people

  6. I searched for a while to find a CPA in a firm that was willing to take on my taxes with 3-4 jobs for the year (6 month contracts) and multiple W-2’s. I believe that my time is more valuable than tackling all of the tax regulations myself. Sure, make sure you understand your taxes, but delving into the minutia is what CPA’s are for! My CPA has lowered my taxes, through recommendations, to optimize my remote jobs to be set up with one W-2 job and the rest as 1099 or C2C income through a sole proprietor LLC business. Make sure you find one that can see the big picture and wants to help you. Don’t hire a CPA that looks at your intake with furrowed brows and jealousy while saying “sure is interesting how some people make their money”. I walked out of that guys office and never went back. Choose wisely and always ask what can be done to reduce your tax burden each year! Personally, I would hire a CPA in a Firm where there are multiple Accountants as opposed to an individual. You pay a little more and it pays you back in benefits of good service and advice.

    1. I, personally, would love to know more about your CPA or the firm. Shoot me an email? Isaac (at) Overemployed (dot) come.

      I too am in agreement that I’ve had it with the minutia of taxes, especially with the recent changes and more changes to come. Not fun! And it’s so hard to find good accountants that intellectually curious than ones just going through the motion and collecting a payment.

    2. Would you mind sharing the name of your CPA firm? I’m new to OE and any help, especially for legal and tax, is greatly appreciated!

  7. Confused because the vid says to fill out the multiple jobs section of the w-4 but doesn’t that expose to the employer that there’s another job?

    1. No, it does not because, to be honest, your employer’s payroll doesn’t give a hoot about your taxes — you’re on your own. Everybody has side hustles nowadays which impact their taxes. The W4 is just an input/output calculator that tries to model your present and future tax obligations and then tell your employer how much taxes to collect on behalf of the IRS instead of you having to pay on your own every quarter, aka estimated taxes (even the IRS calls it estimated). With Overemployed, you’re going to have to do the latter since your income (especially with RSUs and picking up multiple jobs) will get lumpy and hard to predict with a set-and-forget calculator like the W4.

  8. Any advice on filing for Canadians?

    We have to fill out TD1s for both jobs when you start to give to HR. Should I claim the full amount and not check off the box disclosing I have a 2nd job or should I lie and say I work a tutoring job at night?

    1. Good call out here. Will update with Canada and UK tax implications in the short future! Anyone want to guest blog it more than welcome to reach out!

    1. Sure you can always do that. But you won’t know what they’re doing. And be in for a rude awakening because not many accountants see the Overemployed situation. That said, I’m working on partnering with accountants who understand the Overemployed and the tax complications inside out, at least in the US.

  9. I branched off my second gig from W2 to an LLC and now market myself as a vendor. Took a while to get it to the same w2 level, it doesn’t work for some companies while other love it ( they pay with a credit card). Huge tax savings, off 200k in “sales” only paid 1,500 in taxes (get a good CPA). I do pay normal everything for my reg job (105k). Helped with the child support too, I had full custody of my kids and pay for everything but their mom had a drug problem and got into a financial wreck and tried to get more out of me ( which in Florida she can…such bs). Starting an LLC is another option as your second gig 🙂

  10. Greetings,
    I am starting my 4th job this week. I want to stay positive that I will be fine. I will be making close two $200,000 yearly. I am already paying a lot of taxes it is unfortunate on top of that we end up losing credits.

    1. Four jobs in parallel ? Thats insane ! So 800k for 2021 then ? 200*4 ? WOW ! Congrats. How do you manage all the meetings and deadlines ??

  11. Is there an article on how working two jobs is affected court mandated child support payments ?

    1. This isn’t any form of lawyer advice, just my experience, but I’m in this exact situation: child support payments with 2 jobs (I’m in TX for what it’s worth).
      My main job I’ve had has my full child support payment taken out automatically each month. When I got my second job the state received notice that I was employed and they treated it as a “new employer” so the state originally tried to take child support out of my second job on top of my first job. All I had to do was call my local child support office and they turned off payments for the second job. There wasn’t any hassle with judges or courts or anything like that. I was worried at first because I was worried if my ex found out about my second job she would take me to court for more money, but it’s been about 3 months and no issues so far.

    2. Ugh! That is a complicated situation to say the least. That’s great that the local office worked with you on that, and were fair with you. I can picture other offices not being so nice. Glad it worked out.

    3. This is a great point. I’m about to start my J2 and my biggest worry isn’t my J1 finding out, its my ex-wife finding out. I live in Florida and she can re-open child support cases for recalculation and this could drastically increase my child support payment, which is already high because of our income disparity. The approach I’m going to take is keep it low key and don’t mention anything about J2.

  12. This article is the most sexist, heteronormative thing I’ve read in years. You make XX dollars and “She” makes xx dollars. Not everyone has a wife bro

    1. Lol ok PC bro. If you read the assumptions, it states for simplicity, we assume “married filing jointly” — whatever floats your boat to hit that status. It’s a universal he/him/she/her/wife/wife/husband/husband. Just replace that in your own mind? Thanks for the feedback though. We aren’t professional or the most politically correct writers — we do respect everyone’s beliefs and choices.

      Just trying to get the message across about your taxes. Thanks for the feedback!

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