U.S. tax is an unavoidable topic for everyone who lives in the United States, since America is one of the two countries in the world that taxes its non-resident citizens on worldwide income, which is using the same manner and rates as residents. In other words, everyone who lives in the United States and who receives payments here should get to know some knowledge about U.S. tax. This article intends to introduce the basic information about types of U.S. tax.
- Payroll Taxes
Payroll taxes are imposed by the federal and all state governments, which includes Social Security and Medicare taxes imposed on employers and employees at a combined rate of 15.3%. Basically, payroll tax is a percentage that you withhold from employee wages. In many situations, a company must withhold 7.65% of each employee’s gross wages from their pay, and the company should contribute a matching 7.65% to the rest of the tax. If you are an employee, when you receive your wage report, there should be a place which states as “wage withhold,” and this place is for payroll taxes. As an employee, you do not need to pay the payroll taxes by yourself, since the company would subtract them from your wage directly.
- Property Taxes
Property taxes are collected by local governments and many special purpose authorities based on the fair market value of property, such as school. Property tax is usually imposed only on realty, or the real-estate such as your home, while some property taxes are in forms of business property. The rate for property tax ranges from 0.5% to 1.6%.
- Sales Taxes
Sales taxes are the extra amount of money imposed on many goods and some services. The price that we see at the retail store is usually not the true price of the commodities, but the original price with sales taxes. The rate for sales taxes is around 0% to 16%, which may vary from state to state.
- Estate and Gift Taxes
This kind of taxes are imposed by the federal and some state governments, which take place when you plan to transfer property inheritance by will or by lifetime donation. Similar to other taxes, these taxes also apply to people who have worldwide property.