Open a new Microsoft Word document. Type the appropriate header for your formatting style, either Works Cited or Works Referenced.
Type the citation in full. You will only need to create a hanging indent if the citation is more than one line.
Place the cursor at the beginning of the second line, flush with the left-hand margin. If following MLA, hit the spacebar key five times to create the hanging indent. If the second line does not begin to move when you hit the spacebar, hit Enter then begin spacing. Word will not move the line down, but instead it will allow you to edit the line. This will need to be done manually for each line.
Move the cursor to the ruler at the top of the document if following APA. At the left-hand margin, there is a three-part button that allows you to move the indent, or the starting point, of each line. To customize the handing indent, put your the mouse on the ruler. Drag the bottom triangle and square to where you want the text to align. Between the text at the left and the rest of the paragraph, press the TAB key. Shift the hanging indent button 1/2" to the right for the APA hanging indent. The cursor can be anywhere inside the citation to make the indent automatically occur once you move the button.
Create a hanging indent with the paragraph dialogue box. Click on the Format column. Choose Paragraph from the dropdown list. Look for the area specified Indentation; click on the box below the area marked Special. Choose Hanging Indent from the option list. Word will automatically indent by 0.5", which aligns with APA requirements. Simply input a different measurement if needed. Click Okay and the document will be automatically formatted for the hanging indent. If certain lines do not need the indent, simply highlight that line and shift the ruler back to the desired measurements.