Specific taxes in the US: what you pay beyond income tax, and how to pay less

Last reviewed: November 2026 · Reviewed by Stéphane Gombauld, tax expert, technologist and digital nomad

You know the federal income tax brackets. But your real US tax bill is made of many smaller pieces. After reading this, you'll know every tax you're likely to meet in 2026, what each one costs, and where you can legally cut it.

United States specific taxes in 2026: the key figures

Is this guide for you?

Read on if you…

• are moving to the US as a freelancer, remote employee or founder;
• are a US citizen living abroad and want to know which US taxes still apply;
• want to compare US states before choosing where to live.

Probably not your case if you…

• only need the federal income tax brackets – see the US tax landscape overview;
• are a short-term visitor with no US income.

What do payroll and self-employment taxes add to your bill?

Payroll taxes fund Social Security (pensions) and Medicare (health care for over-65s). Together they're called FICA.

If you're an employee

You pay 6.2% Social Security on wages up to $184,500 in 2026. You also pay 1.45% Medicare on all wages. Your employer pays the same again on top.

Above $200,000 of wages (single), an extra 0.9% Additional Medicare Tax kicks in. Your employer withholds it automatically.

If you're self-employed

Here's the catch. As a freelancer you pay both halves yourself. That's self-employment tax: 15.3% on 92.35% of your net profit. It applies from just $400 of net earnings.

Good news: you can deduct half of it when computing your income tax. And the 12.4% Social Security part stops at $184,500.

On $100,000 of net profit, self-employment tax comes to about $14,130. That's before any income tax.

If you're a US citizen abroad

Self-employment tax follows US citizens abroad. The foreign earned income exclusion does not remove it. Only a totalization agreement – a social security treaty between the US and your new country – can switch it off. The US has about 30 of them.

Which taxes hit your savings and investments?

Net Investment Income Tax

The NIIT is a 3.8% surtax on interest, dividends, rents and capital gains. It applies when your modified adjusted gross income exceeds $200,000 (single) or $250,000 (married filing jointly). These thresholds are not indexed for inflation.

It sits on top of the 0%, 15% or 20% capital gains rates. The details are in our guide to capital gains tax in the US.

Alternative Minimum Tax

The AMT is a parallel tax calculation that limits certain deductions. In 2026 the exemption is $90,100 (single) and $140,200 (joint). Most people with ordinary salaries never pay it. Exercising incentive stock options is the classic trigger.

Crypto

The IRS treats crypto as property, not currency. Every sale, swap or spend is a taxable event. See crypto taxes in the US.

What do state and local taxes cost?

The US has no federal VAT. Instead, states, counties and cities raise their own taxes. Where you live can swing your total bill by 10% of income.

State income tax

Nine states have no tax on wages: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming. Washington does tax large capital gains at 7%, rising to 9.9% on the part above $1 million.

At the other end, California's top rate is 13.3% and New York City residents can pay over 14% combined.

Sales tax

Sales tax is charged at the till, not on invoices between businesses. Five states have no statewide sales tax: Alaska, Delaware, Montana, New Hampshire and Oregon. Combined state and local rates elsewhere reach about 10% in parts of Louisiana, Tennessee and Washington.

Selling digital products? Many states now require you to collect sales tax once you pass an economic nexus threshold – often $100,000 of sales into that state.

Property tax

Property tax is set locally, as a percentage of assessed value. Effective rates run from about 0.3% (Hawaii) to over 2% (New Jersey, Illinois). Low-income-tax states like Texas often compensate with high property tax.

What about estate, gift and other federal taxes?

Estate and gift tax

The US taxes large transfers at 40%. Since the 2025 tax law (the One Big Beautiful Bill Act), the lifetime exemption is $15,000,000 per person in 2026, indexed from 2027. Married couples can effectively shelter $30,000,000.

You can also give $19,000 per person per year without touching that exemption. Gifts to a non-citizen spouse have a separate, higher annual limit.

Non-residents who aren't citizens get only a $60,000 exemption on US-situated assets like US real estate and US shares. That's a real trap for foreign investors.

Other federal taxes you might meet

• Federal excise taxes – 18.4 cents per gallon on gasoline, 24.4 cents on diesel, plus taxes on alcohol, tobacco and air tickets.
• Remittance transfer tax – a new 1% tax on cash-funded money transfers sent abroad from 2026. Transfers from a US bank account or card are exempt.
• Withholding on non-residents – 30% on US dividends and other passive income, often cut by a tax treaty. Selling US property triggers 15% FIRPTA withholding on the gross price.

How can you pay less, legally?

1. Pick your state carefully. Moving from California to Texas can save a high earner over 10% of income. Change your domicile properly: home, driver's licence, voter registration.
2. Elect S-corporation status for a profitable business. You pay yourself a reasonable salary and take the rest as distributions free of self-employment tax. See legal forms of business in the US.
3. Use retirement accounts. A Solo 401(k) or SEP-IRA reduces income tax. It does not reduce self-employment tax.
4. Check for a totalization agreement before you move abroad, so you pay social security in one country only.
5. Claim every deduction. Start with personal tax deductions in the US.

Common mistakes (and what they cost)

• Forgetting self-employment tax in your budget → a surprise bill of 15.3% of profit, plus underpayment penalties for missed quarterly estimates.
• Assuming a move abroad ends US taxes → US citizens remain taxable on worldwide income, and self-employment tax can still apply.
• Leaving a high-tax state "on paper" only → states like California and New York audit residency changes and can tax your whole year.
• Ignoring sales tax nexus on online sales → back taxes, interest and penalties in every state where you crossed the threshold.
• Holding US shares as a foreign investor without planning → 40% estate tax above just $60,000 of US assets.

Frequently asked questions

Does the US have a VAT?

No. The United States has no federal VAT or general sales tax. Instead, 45 states and the District of Columbia charge a retail sales tax, and many cities and counties add their own. Combined rates range from 0% in states like Oregon and Delaware to about 10% in some cities. Sales tax applies to final consumers, not to business-to-business invoices.

How much is self-employment tax in 2026?

Self-employment tax is 15.3% of 92.35% of your net earnings. It combines 12.4% for Social Security, capped at $184,500 of earnings in 2026, and 2.9% for Medicare with no cap. An extra 0.9% applies above $200,000 for single filers. You can deduct half of the self-employment tax when calculating your income tax.

Which US states have no income tax?

Nine states do not tax wages in 2026: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming. Washington still taxes large long-term capital gains. These states often rely more on sales tax and property tax, so compare the total cost of living, not just the income tax line, before you move.

Is there a wealth tax in the US?

No. Neither the federal government nor any state levies an annual wealth tax in 2026. The closest equivalents are local property tax on real estate and the federal estate and gift tax at 40% above a $15 million lifetime exemption. Some states, such as Massachusetts, add a surtax on very high incomes, but that is an income tax.

What is the Net Investment Income Tax?

The NIIT is a 3.8% federal surtax on investment income such as interest, dividends, rents and capital gains. It applies to the smaller of your net investment income or the amount by which your modified adjusted gross income exceeds $200,000 (single) or $250,000 (married filing jointly). The thresholds are fixed and not adjusted for inflation.

Do non-residents pay US estate tax?

Yes, on US-situated assets. A non-resident who is not a US citizen gets only a $60,000 exemption, and the rest is taxed at up to 40%. US real estate and shares of US companies count, even if held through a foreign brokerage account. Some estate tax treaties raise the exemption, so check your country's treaty first.

Related guides

• US tax landscape in 2026: the full picture
• Capital gains tax in the US: rates and exemptions
• Personal tax deductions and benefits in the US
• Choosing a legal form of business in the US
• How crypto is taxed in the US
• Specific taxes in the UK, for comparison
• All country tax guides

Sources

• IRS – Self-employment tax (Social Security and Medicare taxes)
• IRS – Net Investment Income Tax
• IRS – Estate and gift taxes
• Social Security Administration – Contribution and benefit base
• U.S. Code, Title 26 – Internal Revenue Code
• Federation of Tax Administrators – state tax rates

This guide is general information, not personalised tax advice. See how we research and review.