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United States Tax Guide

North America
Last verified June 2026
Sources & verification

Figures on this page were last verified against the cited sources in June 2026. Always check official sources before making a relocation or incorporation decision.

PwC Worldwide Tax Summaries — United StatesIRS — Inflation adjustments for 2026CRS — Expiring TCJA provisions (now mostly permanent under OBBBA)
High Tax Comparator

Best for

  • Zero capital gains

    No CGT on investment, property, or crypto disposals (subject to "investor" classification).

  • No wealth tax

    No annual tax on net worth or assets.

  • Special regime available

    Foreign Earned Income Exclusion (FEIE) — Up to $132,900 of foreign earned income excluded from tax (2026)

Personal Tax Score
45/100
High Tax
Business Tax Score
65/100
Moderate

Personal Income Tax

Tax Residency

Day Threshold
183 days
Note
Green card test or substantial presence test (31 days current year + 183 days over 3-year rolling period)

Income Tax Rates

Top Marginal Rate
37%
Structure
Progressive 10-37% federal (TCJA seven-bracket structure made permanent by the One Big Beautiful Bill Act, signed 4 July 2025); state taxes 0-13.3% additional

Foreign Income Treatment

System
Worldwide
Details
US citizens and resident aliens taxed on worldwide income; Foreign Earned Income Exclusion is $132,900 for 2026

Investment Income

Capital Gains
0-20%%
Dividends
0-20%%
Interest
0-37%%

Preferential rates for long-term capital gains (0/15/20% based on income); 3.8% NIIT may apply above MAGI thresholds

Wealth & Inheritance

Wealth Tax
No - No federal wealth tax; some state property taxes
Inheritance Tax
Yes - Federal estate tax 18-40% above the lifetime exemption. OBBBA raised the exemption to $15M/individual ($30M/couple) effective 2026, indexed thereafter; the prior law would have reverted to ~$7M after 2025.

Special Regimes

Foreign Earned Income Exclusion (FEIE)
Up to $132,900 of foreign earned income excluded from tax (2026)
Foreign Tax Credit
Credit for foreign taxes paid on foreign income

Practical Notes

OBBBA (4 July 2025) made the TCJA individual rates, doubled standard deduction (2026: $16,100 single / $32,200 MFJ), and Section 199A QBI deduction permanent — avoiding the planned 2026 reversion to pre-2018 brackets. SALT cap raised to ~$40,400 for 2026 (was $10k), increasing ~1%/year through 2029 before reverting to $10k in 2030. Citizenship-based taxation remains unique among major countries — US persons abroad still file regardless of residence.

Business & Corporate Tax

Corporate Income Tax

Headline Rate
21%
Effective Rate Note
21% federal + state taxes (average ~26% combined)
Free Zone / Incentives
Various state and federal incentives available

Withholding Taxes

Dividends
30%
Interest
30%
Royalties
30%

VAT / GST

Rate
0%
Note
No federal VAT; state sales taxes 0-10%+

Compliance & Substance

Substance Requirements
High - strict substance and documentation requirements
Compliance Friction
High - complex tax code, extensive reporting

Notable Regimes

  • GILTI regime for foreign income
  • FDII deduction
  • BEAT minimum tax

OECD Pillar Two (15% global minimum tax)

No implementation

No Pillar Two implementation legislated. The GILTI regime (Section 951A) is a separate US-specific minimum-tax mechanism on US-parent foreign income; the current administration has signalled no plans to enact GloBE rules.

See full implementation tracker

Tax Treaty Network

US treatyNo
UK treatyYes
US totalizationNo
Total treaties~70

The US is the originator of the FATCA regime — it does not itself have an IGA. US treaty network is selective compared to the UK's and is gated by limitation-on-benefits provisions. Treaty with Hungary terminated 2024.

See full treaty matrix

Data Sources

PwC Worldwide Tax Summaries — United StatesIRS — Inflation adjustments for 2026CRS — Expiring TCJA provisions (now mostly permanent under OBBBA)

Last verified: June 2026. Always check official sources before making a decision.

FAQ

What is the personal income tax rate in United States?

United States has a top personal income tax rate of 37%. The tax structure is: Progressive 10-37% federal (TCJA seven-bracket structure made permanent by the One Big Beautiful Bill Act, signed 4 July 2025); state taxes 0-13.3% additional. See the detailed breakdown above and verify with official sources.

Do I need to pay tax on foreign income in United States?

United States uses a worldwide system for foreign income. US citizens and resident aliens taxed on worldwide income; Foreign Earned Income Exclusion is $132,900 for 2026

What are the residency requirements for United States?

Tax residency in United States generally requires 183 days of physical presence. Green card test or substantial presence test (31 days current year + 183 days over 3-year rolling period). Always verify current rules with official sources.

Is there a wealth tax in United States?

No, United States does not have a wealth tax. No federal wealth tax; some state property taxes

What is the corporate tax rate in United States?

The corporate tax rate in United States is 21%. 21% federal + state taxes (average ~26% combined)

US citizen moving to United States? Read this first.

United States's top personal rate of 37% means the Foreign Tax Credit (FTC) usually wins over FEIE for US citizens.

  • •FTC (Form 1116) credits United States tax against US tax dollar-for-dollar. Because United States tax exceeds US tax on the same income, you typically owe zero US tax and accumulate carryforward credits (10-year carry).
  • •Self-employment tax is owed in full to the US — no totalization agreement with United States.
  • •For earned income near the FEIE cap (~$130k), FEIE is sometimes simpler administratively. Above the cap, FTC strategy almost always wins given United States's rates.
  • •United States residency days threshold: 183. Treaty tie-breaker rules (where applicable) help with double-tax avoidance.
Read the full US-citizen moving-abroad guide

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