Friday, October 18, 2019

Considering A Second Job? Consider Your Taxes

In this day and age, many people have to work more than one job to make ends meet. Sometimes, though, that second job may end up doing more harm than good, at least where your taxes are concerned. Thus, before you say yes to another job, consider the impact it might have on your taxes and whether or not it’s ultimately worth it.  

Will Your Tax Bracket Change?
One thing to think about is whether or not your second job will put you into a new tax bracket. This will depend on how much you earn at your current job and how much you will earn at the second job.
If you’re already close to the higher end of your current tax bracket, there’s a good chance you’ll get sent into a new one, which could mean being taxed at a higher rate. If that’s something you can manage, then go ahead and take that second job. If not, though, you may want to rethink it.

Will You Lose Out on Credits?
Many people receive special tax credits based on their incomes. One of the most popular is the Earned Income Credit. When considering a new job, think about whether the added income will make you ineligible for various benefits to which you’re currently entitled. If you’re losing out on a lot of benefits and not earning enough at the second job to cover the loss, a second job might not be right for you at this time.

Will You Stop Getting Tax Refunds?
Do you rely on your tax refund each year? If you’re like many people, that check makes a big and positive difference in your life. If it’s a difference that you can’t live without, consider whether or not you’re still likely to get a refund or as big of one if you take on a second job. While not getting a refund is not necessarily a dealbreaker for everyone, think about whether or not it is for you.
A second job is not always a bad thing, but it’s not always a good thing for everyone or for every situation. Thus, consider your own situation and how a second job will affect your taxes before you sign that work contract.