If you changed jobs in 2025, congratulations — that’s exciting.

But many people are surprised to learn that changing jobs affects taxes in ways that don’t show up until filing season. We are already seeing clients ask:

• Why do I owe taxes after switching jobs?
• Do I pay more taxes with two W-2s?
• Is my signing bonus taxed differently?

Let’s walk through the most important changed jobs tax implications you should understand now — not next April.

1. Multiple W-2s and Your Tax Return

If you switched employers in 2025, you’ll receive a multiple W-2 tax return scenario in early 2026.

That alone isn’t a problem.

The issue is this:

Each employer withholds federal income tax as if they are your only job.

That can create:

• Underwithholding after a job change
• Incorrect tax bracket assumptions
• Overpayment of Social Security (which is refundable, but must be properly reported)

If your new salary is higher, your overall tax liability may exceed what either employer withheld individually.

This is one of the most common new job tax implications we see.

2. Underwithholding After a Raise

A pay increase is wonderful.

But if you didn’t properly adjust your Form W-4, you could experience underwithholding after a job change.

Why?

Because:

• Employers default to standard withholding tables.
• Raises can push you into a higher marginal bracket.
• Supplemental pay (like bonuses) is withheld differently.

Many taxpayers ask, “Why do I owe taxes after switching jobs?” We recently explained in detail why refunds and balances due change year to year.
This is usually the reason.

A mid-year projection is often the simplest fix — especially when paired with proactive tax planning.

3. Signing Bonus Tax Rate — What You Should Know

A signing bonus is fully taxable income.

However, the signing bonus tax rate used for withholding is typically a flat supplemental rate (currently 22% for most taxpayers).

Here’s the catch:

That 22% may not be your actual tax rate.

If your total income pushes you into a higher bracket, you may owe additional tax at filing.

This is one of the most misunderstood new job tax implications.

Also, be mindful of repayment clauses. If you leave early and repay the bonus, the tax correction process can be complex.

4. Retirement Rollover Tax Rules (Where Costly Mistakes Happen)

When you leave a job, you must decide what to do with your 401(k).

Understanding retirement rollover tax rules is critical — especially when deciding whether to roll funds into an IRA or leave them in an employer plan. Tax advantages of retirement accounts.

Your options:

1. Leave it with your former employer
2. Roll it into your new employer’s plan
3. Roll it into an IRA
4. Cash it out (rarely advisable)

Common 401(k) rollover mistakes include:

• Missing the 60-day deadline on indirect rollovers — a rule clearly outlined by the IRS.
• Not understanding 20% mandatory withholding
• Triggering penalties unintentionally

If handled correctly, a rollover should not create current tax.

If handled incorrectly, it can create tax plus a 10% penalty.

5. The Rule of 55 and 401(k) Withdrawals

If you are age 55 or older when you separate from service, you may qualify under the Rule of 55 401(k) provision.

This allows penalty-free withdrawals from that employer’s 401(k) plan.

But important limitations apply:

• It only applies to the employer you separated from.
• It does not apply to IRAs.
• If you roll the funds to an IRA first, you lose the Rule of 55 flexibility.

Many taxpayers accidentally eliminate this planning option by rolling funds too quickly.

If early retirement is part of your career shift, review this before moving money.

6. How Changing Jobs Affects Taxes in Other Ways

Beyond wages and retirement, additional tax planning after a job change may include:

• Stock compensation timing (RSUs, ESPPs, options)
• HSA eligibility changes
• Relocation reimbursements
• State tax residency shifts
• Bonus deferrals

Each of these can materially affect your tax return.

7. H.R. 1 Tax Bill 2025 — Why It Matters Now

Recent legislative developments under H.R. 1 may impact individual taxpayers beginning in 2025 and beyond.

While major structural rate changes have not fully taken effect, proposals within H.R. 1 include potential adjustments to:

• Individual income thresholds
• Credit phaseouts
• Reporting requirements
• Retirement-related provisions

If you changed jobs in 2025, this is the ideal time to revisit your overall tax positioning in light of potential legislative updates.

The combination of income change + legislative change is where surprises tend to occur.

Why Last Year’s Tax Result Is Not a Reliable Guide

Many taxpayers assume:

“My income is similar, so my tax result should be similar.”

That assumption often fails after a job change because:

• Pay structure changed
• Withholding changed
• Benefits changed
• Retirement contributions changed

Even small structural differences can materially impact your return.

Practical Next Steps

If you changed jobs in 2025, consider:

• Reviewing year-to-date withholding
• Evaluating signing bonus impact
• Confirming retirement rollover strategy
• Running a tax projection before year-end

Addressing these items now can prevent a surprise balance due.

FAQs: Changed Jobs in 2025 and Taxes

Q: Will I have more than one W-2 if I changed jobs in 2025?
A: Yes. If you worked for multiple employers in 2025, you’ll typically receive a W-2 from each one.

Q: Why do people owe taxes after switching jobs?
A: Withholding is often calculated as if each job is your only job. When combined, total withholding may be too low for your full-year income.

Q: Are signing bonuses taxed differently?
A: Signing bonuses are taxable wages. They’re often withheld at a flat “supplemental” rate, which may be higher or lower than your final tax rate.

Q: What’s the biggest 401(k) rollover mistake after leaving a job?
A: The most common issue is creating an unintended taxable distribution by missing the 60-day rollover window or doing the rollover incorrectly.

Q: What is the “Rule of 55” in simple terms?
A: If you leave a job in or after the year you turn 55, you may be able to take withdrawals from that employer’s 401(k) without the 10% early withdrawal penalty (plan rules apply).

If you’d like help reviewing the tax implications of changing jobs, Rose Group CPAs would be happy to walk through your specific situation.

Proactive planning is always easier than reactive explanations in April.