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I was looking at a IRS W-4 form recently and noticed that it had a section for "Other income (not from jobs)". So let's say you have a W-2 job and a 1099-NEC "job".

You're not employed, per se, with the 1099-NEC job, so could I put my expected earnings from my 1099-NEC job into the "Other income (not from jobs)" section of the W-4 in lieu of paying quarterly taxes via a 1040-ES?

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    Who are you giving that W4 to?
    – littleadv
    Commented Jan 31, 2022 at 17:34
  • @littleadv - my current employer? Who else would I give a W-4 form too? This year I got a W-2 and a 1099-NEC. I have a regular day job through which I get health insurance and can get unemployment, in theory, if I were let go, and I have a consulting gig for which I get a 1099-NEC. They're independent of one another.
    – neubert
    Commented Jan 31, 2022 at 17:49
  • @littleadv - I updated my question to make things a little clearer hopefully
    – neubert
    Commented Jan 31, 2022 at 17:50
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2 Answers 2

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The IRS doesn't care which pocket you take the money out to pay them.

If you have both a salaried (W2, as you say) job and a side contractor gig, you can most definitely adjust your salary withholding to also cover your additional tax liability from your side gig. Same goes with non-earned income (e.g.: you expect to have capital gains, or rental income, or win the lottery - you can adjust your salary withholding to cover for that).

From your question it was not immediately clear that you have this situation where you are both a salaried employee and a contractor, but from your comments you indicated that that is so.

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  • You can definitely use withholding, but simply putting NEC (selfemployment) in 4a will only increase withholding to cover the increased income tax (and probably a little over, if you get QBI deduction for your side business) but not added selfemployment tax which is computed differently and doesn't match the formulas for income-tax withholding; that's why the instructions tell you to use the estimator instead for SE. 4a does work for investments, passive, and gambling, but not SE. Commented Feb 2, 2022 at 1:50
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Box 4a on the W-4 is labeled

Other income (not from jobs).

And the instructions for this line say:

Enter in this step the total of your other estimated income for the year, if any. You shouldn’t include income from any jobs or self-employment.

Contract work is a job, so I don't think you should include it there.

However, you can always use box 4c "Extra withholding" to increase your withholding so that you don't need to make estimated tax payments. The instructions for this line say:

Enter in this step any additional tax you want withheld from your pay each pay period, including any amounts from the Multiple Jobs Worksheet, line 4.

As long as the IRS receives the appropriate amount during the year, they don't care how you label it.

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    Contract is not a job in that regard since you don't have tax withholding from 1099.
    – littleadv
    Commented Feb 1, 2022 at 17:34
  • It's a job, it just doesn't have withholding.
    – Barmar
    Commented Feb 1, 2022 at 17:36
  • Notice: in that regard. Withholding is what we're talking about here.
    – littleadv
    Commented Feb 1, 2022 at 17:41
  • It specifically says "not from jobs". It doesn't say "not from jobs that have withholding".
    – Barmar
    Commented Feb 1, 2022 at 17:43
  • If they wanted a line for all income without withholding, they would have just said that.
    – Barmar
    Commented Feb 1, 2022 at 17:44

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