Many factors affect the tax burden of a second job, but an additional $10,000 income annually increases federal income taxes between $1,000 and $3,960, depending on the individual's previous income and tax bracket, according to the 2014 tax rate tables at Bankrate. Other circumstances also affect the taxes that an individual pays.Continue Reading
The IRS uses tiers of income that it taxes at different rates. Each tier is a range of taxable income, and each successive tier is taxed at a higher rate. In 2014, 10 percent is the lowest rate and 39.5 percent is the highest, according to Bankrate. The IRS taxes income earned at the lower tier at that rate and income above the tier at the higher rate. Thus, adding a second job does not affect the tax rate of earnings at the first job. However, the wage earner pays the higher rate for all earnings exceeding the lower bracket due to the second income.
The second income has the potential to affect taxes more than shown on the tax table. In some instances, the income pushes the individual over the limits for special income tax credits, such as earned income credit or the child tax credit. The limits for these credits differ by filing status, according to the IRS. A couple filing jointly with one qualifying child loses the child tax credit if their income exceeds $43,941. The maximum potential credit for a couple with one child is $3,305.Learn more about Income Tax