US taxes in 2026: everything you need to know, in one page

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

You're thinking about moving to the US, already live there, or carry a US passport abroad. The US system is unusual: it taxes by citizenship, and it has three layers – federal, state and local. This page gives you the full picture for 2026, then points you to the detailed guide for each topic.

United States tax landscape in 2026: the key figures

Is this guide for you?

Read on if you…

• are considering the US as your next base and want the big picture first;
• are a US citizen or green-card holder living abroad;
• run, or plan to run, a business with a US link.

Probably not your case if you…

• already know the system and need one topic – jump to the US tax guides list near the end;
• only visit the US as a tourist for a few weeks a year.

How does the US tax system work?

Citizenship, not just residence

Most countries tax you because you live there. The US also taxes you because you're a citizen. A US passport means filing a US return every year, wherever you live.

Three groups are taxed on worldwide income:

• US citizens, at home or abroad.
• Green-card holders, until the card is formally given up.
• Resident aliens who pass the substantial presence test – all days this year, plus a third of last year's and a sixth of the year before's. Reach 183, with at least 31 this year, and you're resident.

Everyone else is a non-resident alien, taxed only on US-source income. The full rules are in our guide to tax residency in the US.

Three layers: federal, state, local

You file a federal return with the IRS. Most states require their own return too, with their own residence rules. Some cities, like New York City, add a local income tax.

That makes your state choice a big tax decision. A high earner can pay over 10% more of their income in California than in Texas.

Main taxes in the US at a glance

Two more features to know. First, an extra 0.9% Medicare tax applies to earnings above $200,000 (single). Second, the 2025 tax law (the One Big Beautiful Bill Act) made the 2017 rate cuts permanent and added temporary deductions for tips, overtime and seniors from 2025 to 2028.

Every tax beyond income tax is explained in specific taxes in the US.

Are there special regimes for newcomers?

Honestly? No. The US has no flat-rate or reduced regime for people moving in. Once resident, you pay the same rates as everyone else.

What helps newcomers is timing:

• Dual-status year. You're usually non-resident until you arrive, so earlier foreign income isn't taxed.
• No step-up on arrival. Gains built up before the move are taxed when you sell as a resident. Selling before you arrive can save a lot.
• Tax treaties. The US has income tax treaties with over 60 countries.

The real incentives target Americans abroad: the foreign earned income exclusion of $132,900 in 2026, the housing exclusion and the foreign tax credit. Puerto Rico also runs its own low-tax regime. See US tax incentives for expats and digital nomads.

Moving in and moving out

Moving to the US

1. Get the right visa. There's no digital nomad visa; you need a work, investor or family visa.
2. Count your days so you know your residency start date.
3. Sell or restructure foreign assets before you arrive if they carry large gains.
4. Check foreign funds and companies. Non-US funds are often PFICs – passive foreign investment companies – taxed harshly in the US.
5. Choose your state with income, sales and property tax in mind.

The step-by-step process is in the practical guide to obtaining US tax residency.

Leaving the US

Non-citizens stop being resident when they leave and fail the presence test, or give up the green card. US citizens stay taxable until they formally renounce.

Renouncing, or giving up a long-held green card, can trigger the exit tax if you're a "covered expatriate". That means a net worth of $2 million or more, high average US tax, or incomplete compliance over 5 years. See the practical guide to ceasing US tax residency.

Running a business in the US

Most freelancers start as a sole proprietor or a single-member LLC. Profit is taxed on your personal return, plus 15.3% self-employment tax.

Once profit grows, an S corporation election can cut self-employment tax. A C corporation pays 21% federal tax, and dividends are taxed again in your hands. Non-US founders often use an LLC, which is cheap to set up and can be run remotely.

Here's the catch for non-residents. A US LLC may be tax-free in the US but taxable where you live and manage it. Compare options in legal forms of business in the US, and check what you can write off in business expenses in the US.

Common mistakes (and what they cost)

• US citizens abroad not filing → FBAR and Form 8938 penalties of $10,000 or more per year, even with no tax due.
• Moving in with foreign mutual funds → PFIC rules can tax gains at the top rate, plus an interest charge.
• Leaving a high-tax state without cutting ties → California or New York can tax your whole year's income.
• Picking an S corporation as a foreign owner → the election is invalid, and the company is taxed as a C corporation.
• Selling assets after becoming resident → pre-move gains taxed in full in the US.

Frequently asked questions

Does the US tax its citizens living abroad?

Yes. The US taxes citizens on worldwide income wherever they live. You must file a federal return each year if your income exceeds the filing threshold. The foreign earned income exclusion, the housing exclusion and the foreign tax credit usually prevent double taxation. You must also report foreign accounts on an FBAR above $10,000.

What are the US income tax rates for 2026?

Federal income tax uses seven brackets in 2026: 10%, 12%, 22%, 24%, 32%, 35% and 37%. For a single filer, the top 37% rate applies above about $640,600 of taxable income. Most states add their own income tax, from 0% in states like Texas and Florida to 13.3% in California.

How do I become a US tax resident?

As a non-citizen, you become a US tax resident by holding a green card or by meeting the substantial presence test. That test adds your days in the US this year, one-third of last year's days and one-sixth of the year before's. If the total is 183 or more, with at least 31 days this year, you are resident.

Does the US have a VAT or wealth tax?

No. The US has no federal VAT and no annual wealth tax at any level. Instead, most states and many cities charge a retail sales tax, and local governments charge property tax on real estate. Large estates and gifts are taxed at 40% above a lifetime exemption of $15 million per person in 2026.

Which US states have no income tax?

Nine states have no tax on wages in 2026: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming. Washington still taxes large capital gains. These states tend to raise more through sales and property taxes, so compare your total tax and living costs, not just the income tax rate.

Is there an exit tax when leaving the US?

There is no exit tax for non-citizens who simply leave. An exit tax applies when a US citizen renounces citizenship, or a long-term green-card holder gives up the card, and qualifies as a covered expatriate. They are taxed as if they sold all assets the day before leaving, above an inflation-adjusted exclusion.

United States tax guides

• Tax residency in the US – the green card and substantial presence tests, and treaty tie-breakers.
• Practical guide to obtaining US tax residency – visas, timing and your first US tax year.
• Practical guide to ceasing US tax residency – leaving, giving up a green card and the exit tax.
• Specific taxes in the US – payroll, self-employment, state, sales and estate taxes.
• Capital gains tax in the US – rates by asset, holding periods and reliefs.
• Cryptocurrency taxes in the US – how sales, swaps, staking and mining are taxed.
• Personal tax deductions and benefits in the US – standard deduction, credits and itemising.
• Tax incentives for expats and digital nomads in the US – FEIE, housing exclusion, foreign tax credit and Puerto Rico.
• Legal forms of business in the US – LLC, S corporation or C corporation.
• Business expenses in the US – what you can deduct and how equipment is written off.
• Tax fraud regulations of the US – penalties, FBAR rules and how to fix past mistakes.

Related guides

• Tax residency in the US
• Specific taxes in the US
• US expat and digital nomad incentives
• Canada tax landscape overview
• United Kingdom tax landscape overview
• Ireland tax landscape overview
• All country tax guides

Sources

• IRS – Internal Revenue Service
• IRS – International taxpayers
• IRS – Determining an individual's tax residency status
• Social Security Administration – Contribution and benefit base
• U.S. Code, Title 26 – Internal Revenue Code
• OECD – Tax policy and statistics

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