Taxes in the United States
The US has a complex, multi-layered tax system. Understanding it is essential for financial planning and legal compliance.
Tax Residency
You're a US tax resident if you:
- Are a US citizen or green card holder
- Meet the substantial presence test (183+ days over 3 years with weighted formula)
- Choose to be treated as resident
Tax residents pay tax on worldwide income.
Non-residents pay tax only on US-source income.
Types of Taxes
| Tax Type | Rate Range | Who Collects |
|---|---|---|
| Federal Income | 10-37% | IRS |
| State Income | 0-13.3% | State |
| Social Security | 6.2% | Federal |
| Medicare | 1.45% | Federal |
| Local Income | 0-4% | City/County |
| Sales Tax | 0-10.5% | State/Local |
| Property Tax | 0.5-2.5% | Local |
Federal Tax Brackets (2026)
| Income (Single) | Rate |
|---|---|
| $0-$11,600 | 10% |
| $11,601-$47,150 | 12% |
| $47,151-$100,525 | 22% |
| $100,526-$191,950 | 24% |
| $191,951-$243,725 | 32% |
| $243,726-$609,350 | 35% |
| $609,351+ | 37% |
States Without Income Tax
- Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming
*Only tax investment income, not wages
Key Filing Dates
- January 31: W-2 and 1099 forms due from employers
- April 15: Tax filing deadline (extensions available)
- October 15: Extended filing deadline
- Quarterly estimates: Apr 15, Jun 15, Sep 15, Jan 15
For New Immigrants
First year can be complex - you may be a "dual-status" alien.
Documents needed:
- W-2 from employer(s)
- 1099s for other income
- SSN or ITIN
- Records of foreign income (if applicable)
Treaty benefits: Many countries have tax treaties with the US that may reduce double taxation.
Tax-Advantaged Accounts
| Account | Benefit | Limit (2026) |
|---|---|---|
| 401(k) | Pre-tax contributions | $23,500 |
| Roth IRA | Tax-free growth | $7,000 |
| HSA | Triple tax advantage | $4,300/$8,550 |
| 529 | Education savings | Varies by state |
Getting Help
- Free options: IRS Free File, VITA (Volunteer Income Tax Assistance)
- Software: TurboTax, H&R Block, FreeTaxUSA
- Professional: CPA or Enrolled Agent (recommended for complex situations)
Pro Tips
- •Maximize 401(k) contributions - it's the best tax shelter available
- •Keep records of all income sources, especially from abroad
- •Consider state taxes when choosing where to live
- •File on time even if you can't pay - penalties for not filing are worse
- •Check if your home country has a tax treaty with the US
Have questions about taxes in United States?