🇺🇸 United States · Tax System
Corporate tax, VAT/GST, personal income tax, capital gains, and filing obligations.
Quick answer
The U.S. taxes federal income (IRS) plus state and often local taxes; rates vary by state and some have no income tax. U.S. citizens and residents are taxed on worldwide income — the U.S. is unusual in taxing citizens who live abroad. Businesses file federal and state returns.
Federal taxes are administered by the IRS; there is no federal VAT. Corporations pay federal corporate income tax, while sales taxes and many other taxes are set at the state and local level.
- The federal corporate income tax rate is a flat 21%; states may levy additional corporate taxes.
- There is no federal VAT/GST; sales tax is set and collected at the state and local level.
- Federal filing and payment, including obtaining the EIN, are handled through the IRS.
Step-by-step
- 1
Determine your tax residency
Work out whether you are a US tax resident: citizens and green-card holders are taxed on worldwide income, and others may be residents under the substantial-presence test.
- 2
Get a taxpayer ID
Obtain a Social Security Number (SSN) or, if ineligible, an Individual Taxpayer Identification Number (ITIN) from the IRS; businesses use an EIN.
- 3
Understand the taxes that apply
Identify federal income tax (IRS) plus any state and local income and sales taxes; some states have no income tax.
- 4
Set up withholding or estimated payments
Employees complete Form W-4 for withholding; the self-employed and others pay quarterly estimated taxes.
- 5
File your returns
File the federal return (Form 1040) by the deadline (mid-April), plus any state returns; US persons abroad also report foreign accounts (FBAR/FATCA).
- 6
Pay, keep records and get advice
Pay any balance due, keep records for the statutory period, and seek professional advice for cross-border situations.
Checklist
- Tax residency determined (citizen/green-card/substantial presence)
- Taxpayer ID (SSN / ITIN / EIN)
- Applicable taxes identified (federal + state + local)
- Withholding (W-4) or quarterly estimated payments
- Federal return (Form 1040) + any state returns
- Foreign-account reporting (FBAR/FATCA) if applicable
- Records kept for the statutory period
- Professional advice for cross-border cases
Official authorities
- Internal Revenue Service (IRS)
Federal tax authority — filings, EIN and federal tax obligations.
Frequently asked questions
Does the U.S. tax worldwide income?
Yes — U.S. citizens and tax residents are taxed on worldwide income, though foreign tax credits and the foreign earned income exclusion can reduce double taxation.
Do all states have income tax?
No — several states such as Texas and Florida have no personal income tax, but you may still owe federal tax and other state taxes.
How is tax residency determined?
Tax residency is based on citizenship, green-card status or the substantial-presence test; non-residents are generally taxed only on U.S.-source income.
Official-information aggregation, not legal advice. Always verify on the authority's own site.
Government portals
- The White House — Official residence and office of the US President — executive orders, policy briefings, press releases
- U.S. Department of State — US passport and visa services, travel warnings, embassy information worldwide
- Internal Revenue Service (IRS) — Federal tax filing, refund status, ITIN/EIN applications, and Free File program
- USCIS — Green card, H-1B and work visas, naturalization, immigration benefits, and case status