How To Create a Hanging Indent in Word

The hanging indent feature indents each line except the first line by the amount specified in the By field.

The hanging indent feature indents the first line of the paragraph from the margin by the amount specified in the Left field. The amount in the Left field plus the amount specified in the By field indent all subsequent lines.

How to do it?

1. Type the following:
   Hanging Indent: The hanging indent feature indents the first line by the amount specified in the Left field. Subsequent lines are indented by the amount specified in the Left field plus the amount specified in the By field.
2. Select the paragraph you just typed.
3. Choose the Home tab.
4. Click the launcher in the Paragraph group. The Paragraph dialog box appears.

5. Choose the Indents and Spacing tab.
6. In the Special field, click to open the pull-down menu.
7. Click Hanging.
8. In the By box, type 2".
9. Click OK.
10. Place the cursor after the colon following "Hanging Indent."
11. Press the Tab key. Notice that the indentation changes.

Video Tutorial

Reference

http://www.baycongroup.com/wlesson0.htm