Income tax in the USA

Personal taxation in the United States is a very complex matter. Indeed, tax is due at federal, states and sometimes local levels. For instance, if you live in New-York city, you have to pay the federal tax, the tax of the state of New-York and the tax of the city of New-York. The tax burden varies significantly between states: some states do not levy taxes on personal income or corporate profits like in Texas, while others have a fairly heavy taxation like in New York. Conversely, some taxes are exclusively levied at a local level like the Sales and Use tax. As a consequence, there is no VAT per se in the United States.

It is also important to determine your tax status in the country. A tax resident is taxed on his income as any U.S. citizen. You are considered as a tax resident by the U.S. administration if:

• You hold a green card;

• You have lived in the United States for more than 183 days;

• You have lived in the United States for more than 30 days during the last calendar year and at least 183 days during the current year and the previous last two years. 

In general, income tax is deducted at source on the salary and an annual tax return form must be filed at the end of the fical year. 

 Note:

It is highly recommended to get some information about the taxation system in your state! Even if your state does not levy income tax, the federal tax is not avoidable!


 Useful links: 

Income Tax in the United States 

http://en.wikipedia.org/wiki/Income_tax_in_the_United_States

Department of the Treasury 

http://www.treas.gov/education/fact-sheets/taxes/ustax.shtml

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