How does income tax work in the USA?

In the United States, income tax (IR) rates are based on a progressive scale, in which the rates increase as the taxpayer's income increases.

Federal Income Tax rates range from 10% to 37%, and the percentage paid is applied to the individual's gross income, after any deductions allowed by law have been taken.

Income tax in the United States is filed annually, and taxpayers have until April 15th to file their tax returns. This is known as the famous Tax Day, which is the deadline for filing and paying taxes for the previous year.

It is important to remember that it is the taxpayer's own responsibility to file their tax return. Also, there are several tax deductions available to US taxpayers such as health, education, and charitable expenses that can reduce the final amount of tax you have to pay.

Tax Brackets

In the USA there is the concept of Tax Brackets, which works in the following way: there are income brackets for the taxation of individuals, and they are progressive. 

For example, those with an annual income of up to $11,000 pay 12% federal income tax. Those with an annual income of up to $95,375 pay 24% income tax, and those who are considered super wealthy, with incomes exceeding $578,125, pay 37% federal income tax.

State Income Tax

Unlike in Brazil, in some states in the USA there is a state income tax.

States that do not charge State Income Tax

One of the most attractive states for immigrants is Florida, which does not charge state income tax. 

Added to this, Florida is a very business-friendly state, with low corporate tax rates and a growing economy. Another state popular with immigrants is Texas, which also has no personal income tax and a favorable business environment.

Other states that do not charge state income tax are: Alaska, Nevada, South Dakota, Tennessee, Wyoming, and Washington. 

Sales Tax (equivalent to the Brazilian ICMS)

Sales Tax is a tax on the sale of goods and services, similar to the ICMS that exists in Brazil.

This tax, which in Brazil can exceed 22% depending on the state and type of merchandise, is on average much lower in the USA. 

By way of comparison, the states with the highest Sales Tax are: Louisiana (9.5%), Tennessee (9.5%), Arkansas (9.4%), Alabama (9.2%), and Oklahoma (8.9%).

California, which is a state beloved by tourists, levies an 8.8 percent rate of this tax.

Lower Sales Tax States

Alaska, Delaware, Montana, New Hampshire, and Oregon, on the other hand, do not charge any sales tax on goods and services.

Property Tax

The Property Tax, also known as property tax, is a tax levied annually by local governments in the United States on the value of real estate. This tax is similar to the IPTU that exists in Brazil.

It is a direct tax that property owners must pay to the municipality or county where the property is located. The amount of the tax is calculated based on the valuation of the property, which is carried out periodically by the local authorities. 

The US states with the lowest Property Tax are: Hawaii (0.27%), Alabama (0.39%), Nevada (0.48%), Colorado (0.48%) and Idaho (0.49%).

Pay less tax and live better

Paying less taxes and living better is a desire of many Brazilians, and migrating to the USA is certainly an interesting option for those seeking this reality. 

This is because, as you have just read, compared to Brazil, taxes in the US are considerably lower.

Investing is not the only way to move to the USA!

Investing in the United States is one way to get a green card, but it's not the only way !

Your profession can be your passport to the USA

You may be eligible for a green card in the EB-2 category if you have a recognized degree or technical expertise, more than five years of experience in your field of professional practice, and if your profession is of national interest to the U.S.

Professionals such as doctors, nurses, psychologists, engineers and airline pilots fall into these categories.

And, in this visa category, if you are approved for a Green Card, your spouse and children under 21 will also be covered, without the need for you to have a previous job offer in the United States.
Want to know if you are eligible? Fill out our form and we will contact you as soon as possible.