Why this matters

If you hold more than one job (including side gigs or freelance work), each employer typically withholds as if their job were your only source of income. That can understate your combined tax and leave you owing tax at filing time. Adjusting withholding makes paychecks and tax liability align more closely over the year.

Quick, actionable steps

How to apply the adjustments (practical options)

1) Use the IRS Estimator: enter wages from every job and other income, credits, and deductions. It shows recommended W‑4 entries.

2) Adjust one employer’s W‑4: have your highest‑paying job withhold extra by entering a dollar amount on Line 4(c) (Extra withholding). This is simple and often easiest.

3) Split withholding: divide the additional withholding between jobs to smooth cash flow.

4) Pay estimates: if you have irregular freelance or gig income, pay quarterly estimated taxes using Form 1040‑ES (https://www.irs.gov/forms-pubs/about-form-1040-es).

Safe‑harbor and penalty avoidance (key rules)

  • To avoid an underpayment penalty, you generally must pay at least 90% of your current year tax liability or 100% of prior year tax liability through withholding and estimated payments. If your adjusted gross income (AGI) exceeded $150,000 in the prior year, the safe‑harbor threshold is typically 110% of prior year tax (IRS guidance).

Real example (rounded)

  • Job A pays $60,000; Job B pays $20,000. If each employer withholds as if the job were sole income, total withholding will likely understate the tax on $80,000 combined income. Using the IRS Estimator and adding extra withholding of $50–$100 per pay period at Job A can close the gap and reduce the chance of owing at tax time.

Common mistakes to avoid

  • Assuming equal withholding per job is correct. Withholding must reflect combined income.
  • Waiting until filing season. Update W‑4s promptly after pay changes, marriage, or other life events.
  • Forgetting self‑employment income. Freelance earnings require estimated payments or additional withholding.

Where to adjust vs. when to make estimated payments

  • If most income is wage income across two or more employers, adjusting W‑4(s) is usually enough.
  • If you have large, variable non‑wage income (freelance, investment), also make quarterly estimated payments.
  • Use the estimator each year or after a major change (new job, raise, marriage).

Interlinks for deeper reading

Professional tips from practice

  • I typically advise clients to increase withholding on their highest‑paying job first — it’s simple and lowers the risk of underwithholding.
  • Revisit withholding each payroll cycle after a raise or new position; small adjustments early in the year reduce year‑end surprises.

Disclaimer

This article provides general information and not individualized tax advice. For personal tax planning, consult a CPA or enrolled agent who can review your full financial picture.

Authoritative sources