Country overview
United States
Federal income tax is run by the IRS; each state sets its own income, corporate and sales taxes. There is no federal VAT or sales tax.
- Indirect tax
- No VAT — state and local sales taxes
- Tax authority
- Internal Revenue Service (IRS) and state revenue departments
- Currency
- USD
Key points
- Tax year 2026 federal income tax rates are 10%, 12%, 22%, 24%, 32%, 35% and 37%. The standard deduction is $16,100 (single), $32,200 (married filing jointly) and $24,150 (head of household).
- C corporations pay a flat 21% federal corporate income tax. LLCs and S corporations are usually taxed as pass-throughs on the owners’ returns.
- Individual returns (Form 1040 / 1040-NR) for 2026 are due on 15 April 2027. US citizens and residents living abroad get an automatic extension to 15 June, but interest runs from 15 April.
- US citizens are taxed on worldwide income wherever they live. The foreign earned income exclusion for 2026 is $132,900. Foreign accounts above $10,000 in aggregate must be reported on an FBAR.
- Social Security tax is 6.2% each for employer and employee on wages up to $184,500 in 2026; Medicare is 1.45% each with no cap, plus 0.9% additional Medicare tax on high earners.
Sources: IRS Rev. Proc. 2025-32 (tax year 2026 inflation adjustments); IRS Publication 15 (2026); SSA 2026 wage base; FinCEN (FBAR). Checked November 2026.
Services available
- Personal income tax returns
- Tax planning & advisory
- Tax notices & disputes support
- Bookkeeping
- VAT / sales tax registration & returns
- Business & corporate tax
- Audit & assurance coordination
- Payroll & WPS
- Financial statements
- Company setup accounting
- CFO advisory
- US company formation & LLC accounting
- US expat tax (Americans abroad)
- US sales tax compliance
This tool is general guidance only and may contain mistakes or miss recent changes. It is not tax or accounting advice, and we accept no liability for decisions made on it. Always check with the relevant tax authority or a qualified accountant. See the disclaimer.
The IRS and federal returns
The Internal Revenue Service collects federal income, payroll and excise taxes. The individual tax year is the calendar year; most returns are filed electronically.
- Form 1040 — US citizens and resident aliens
- Form 1040-NR — non-resident aliens with US-source income
- Form 1120 — C corporations (21% flat rate)
- Form 1120-S — S corporations (pass-through)
- Form 1065 — partnerships and multi-member LLCs
Tax year 2026 brackets and standard deduction
Figures from IRS Rev. Proc. 2025-32. Each rate applies only to income inside its band.
| Rate | Single | Married filing jointly | Head of household |
|---|---|---|---|
| 10% | $0 – $12,400 | $0 – $24,800 | $0 – $17,700 |
| 12% | $12,400 – $50,400 | $24,800 – $100,800 | $17,700 – $67,450 |
| 22% | $50,400 – $105,700 | $100,800 – $211,400 | $67,450 – $105,700 |
| 24% | $105,700 – $201,775 | $211,400 – $403,550 | $105,700 – $201,750 |
| 32% | $201,775 – $256,225 | $403,550 – $512,450 | $201,750 – $256,200 |
| 35% | $256,225 – $640,600 | $512,450 – $768,700 | $256,200 – $640,600 |
| 37% | $640,600+ | $768,700+ | $640,600+ |
| Standard deduction | $16,100 | $32,200 | $24,150 |
Married filing separately: as single up to $256,225, 35% to $384,350, 37% above; standard deduction $16,100. Source: IRS Rev. Proc. 2025-32.
LLC basics
A limited liability company is formed with a state, not the federal government. For federal tax a single-member LLC is disregarded (its income goes on the owner’s return), a multi-member LLC is taxed as a partnership, and either can elect to be taxed as a corporation.
A foreign-owned single-member LLC must still file Form 5472 with a pro-forma 1120 each year — a common miss with large penalties. State annual reports and fees vary; see each state page.
EIN and ITIN
An Employer Identification Number (EIN) identifies a business to the IRS and is needed to open a bank account, hire staff and file returns. It is free from the IRS.
An Individual Taxpayer Identification Number (ITIN) is for individuals who must file or be named on a US return but cannot get a Social Security number. It is requested on Form W-7, usually with the tax return.
FBAR and FATCA for Americans abroad
US citizens and green-card holders living in the Gulf, Pakistan or the UK must still file a US return. The foreign earned income exclusion (Form 2555, up to $132,900 for 2026) or the foreign tax credit (Form 1116) usually prevents double tax.
FBAR (FinCEN Form 114) is filed separately with FinCEN when foreign accounts exceed $10,000 combined at any time; it is due 15 April with an automatic extension to 15 October. FATCA Form 8938 goes with the tax return when higher thresholds are met.
Estimated taxes
If tax is not withheld from your income (self-employment, rental, investment income), you generally pay quarterly estimates with Form 1040-ES: 15 April, 15 June, 15 September and 15 January. Underpaying can trigger a penalty even if you pay in full with the return.
Payroll: 941, W-2 and 1099
Employers withhold income tax and FICA, deposit it on a set schedule and file Form 941 quarterly (Form 940 annually for federal unemployment tax).
Forms W-2 (employees) and 1099-NEC (contractors paid $2,000 or more, for payments after 2025) are due by 31 January.
Sales tax nexus after Wayfair
In South Dakota v. Wayfair (2018) the Supreme Court allowed states to require out-of-state sellers to collect sales tax based on economic activity alone. Every state with a sales tax now has an economic nexus rule, often $100,000 of sales; marketplace facilitators such as Amazon usually collect for their sellers.
State taxes: 50 states + DC
Most Americans also pay state income tax, and almost every purchase carries state and local sales tax. Compare all states or open one for its brackets, rates and deadline.
Tax system overview
The United States taxes at three levels: federal (run by the IRS), state and local. Federal income tax applies to individuals and corporations nationwide; each state decides its own income, corporate and sales taxes. There is no federal VAT or sales tax. US citizens and green-card holders are taxed on worldwide income even when they live abroad.
Key taxes
| Tax | Headline rate | Notes |
|---|---|---|
| Federal individual income tax | 10%–37% | Seven brackets for tax year 2026; standard deduction $16,100 single, $32,200 married filing jointly, $24,150 head of household. |
| Federal corporate income tax | 21% | Flat rate on C corporations (Form 1120). Most states add their own corporate tax. |
| Social Security and Medicare (FICA) | 7.65% + 7.65% | Employee and employer each pay 6.2% Social Security on wages up to $184,500 (2026) and 1.45% Medicare; 0.9% additional Medicare on wages above $200,000. |
| Self-employment tax | 15.3% | Social Security and Medicare for the self-employed, on net earnings (Schedule SE). |
| State sales tax | 0%–7.25% (state) | Set by each state; local rates are added on top. Five states have no statewide sales tax. There is no VAT. |
Headline rates as at November 2026. Exemptions, reduced rates and special regimes apply.
Registration thresholds
- Foreign earned income exclusion (2026): up to $132,900 per qualifying person
- FBAR: required when foreign financial accounts exceed $10,000 in aggregate at any time in the year
- Form 8938 (FATCA), living abroad: above $200,000 at year end or $300,000 at any time (single); $400,000 / $600,000 (joint)
- Form 1099-NEC: payments of $2,000 or more to a contractor in a year (payments after 2025)
- Sales tax economic nexus: commonly $100,000 of sales into a state — varies by state, confirm with your accountant
Rules by topic
VAT / sales tax
No VAT. Sales tax is charged by 45 states and DC, plus local jurisdictions. Since South Dakota v. Wayfair (2018), remote sellers can owe sales tax in a state once their sales there pass its economic nexus threshold.
Corporate tax / zakat
C corporations pay 21% federal tax on Form 1120 plus any state corporate or franchise tax. S corporations (1120-S) and multi-member LLCs (1065) usually pass income to owners; a single-member LLC is disregarded by default.
Personal income tax
Residents and citizens file Form 1040; non-residents with US income file Form 1040-NR. Rates run from 10% to 37%. Nine states have no tax on wages; the rest use flat or graduated rates.
Payroll and social insurance
Employers withhold federal income tax and FICA, file Form 941 each quarter, and issue W-2s (and 1099-NECs to contractors) by 31 January. State withholding and unemployment insurance apply separately.
Company accounts and audit
Companies are formed under state law with the Secretary of State. An EIN from the IRS is needed to bank, hire and file. Non-residents can own a US LLC; most states require an annual report and fee.
Record keeping
The IRS generally recommends keeping records for at least 3 years after filing, longer in some cases (for example 6 years if income was substantially under-reported, and 4 years for employment tax records).
Deadlines
See the dated filing and payment deadlines for this country in our free deadlines tool. Open tax deadlines