Taxes in the USA: Types, Rates, and Differences for Companies, Residents, and Non-residents

Introduction

The tax system in the USA is one of the most complex in the world, as it includes taxes at the federal, state, and local levels. The amount of tax rates depends on the status of the taxpayer: company, resident individual, or non-resident. In this article, we will discuss the main taxes in the USA, their rates, and the differences in taxation for residents and non-residents, as well as the tax rates on dividends, interest, and royalties.

1. Taxes for Individuals

Federal Income Tax

Individuals in the USA are subject to federal income tax (Federal Income Tax). It is progressive, meaning that the rate increases as income rises. In 2024, the following tax rates apply:

For married couples filing jointly, the income thresholds are higher.

State Income Tax

Some states, such as Florida, Texas, and Nevada, do not levy a state income tax. In other states, such as California and New York, a progressive rate applies.

Examples:

• California – from 1% to 13.3%
• New York – from 4% to 10.9%

Social Security Taxes (FICA – Social Security and Medicare)

Working individuals are also required to pay social security taxes:

• Social Security – 6.2% on income up to $168,600 (in 2024).
• Medicare – 1.45% with no income limit.
• Additional Medicare Tax – 0.9% for income over $200,000 (for single taxpayers).

Non-resident Taxation (Nonresident Alien Taxation)

Non-residents (those who do not live in the USA for more than 183 days a year and do not have a green card) are taxed only on income from US sources.

• Salary and fees – taxed at regular rates.
• Interest, dividends, and royalties – taxed at a rate of 30% unless there is a double tax treaty.

2. Taxes for Companies in the USA

Federal Corporate Income Tax

For corporate structures (C-Corporation), a fixed corporate tax rate of 21% applies.

State Corporate Taxes

Corporate income tax differs in different states. For example:

• California – 8.84%
• New York – 6.5%

Some states, such as Nevada and Wyoming, do not levy corporate tax.

Taxes for Other Types of Companies

• S-Corporation – profits are taxed at the owners’ level (pass-through taxation).
• LLC (Limited Liability Company) – taxation depends on the structure (can be taxed as a corporation or as a sole proprietorship).

3. Taxes on Investment Income (Dividends, Interest, Royalties)

Dividend Tax

The tax rate on dividends depends on their type:

• Ordinary Dividends – taxed as ordinary income (up to 37%).
• Qualified Dividends – reduced rate:
  • 0% – for income up to $47,150 (single taxpayer).
  • 15% – for most taxpayers.
  • 20% – for income over $518,900.

For non-residents, the standard dividend tax rate is 30% if there is no double taxation treaty.

Interest Tax

• For residents, interest is taxed according to the standard scale (up to 37%).
• For non-residents, the interest tax rate is 30% (unless an exemption applies, e.g., for bank deposits).

Royalty Tax

• For residents – taxed as ordinary income.
• For non-residents, the standard tax rate is 30%.

4. Additional Taxes and Fees

Capital Gains Tax

• Short-term (income from assets held for less than a year) – taxed at ordinary rates (up to 37%).
• Long-term (more than a year) – reduced rates: 0%, 15%, or 20%.

Gift Tax

• Exemption – $18,000 per year (per person).
• If the amount exceeds the limit, the tax rate can reach up to 40%.

Estate Tax

• Exemption limit – $13.61 million (in 2024).
• Tax rate – up to 40%.

5. State Taxes

Conclusion

The U.S. tax system is complex and includes many taxes for individuals and legal entities. The main rates are as follows:

• Individuals: up to 37% (income tax), 15-20% (dividends), 0-37% (interest).
• Corporations: 21% (federal tax), plus possible state tax rates.
• Non-residents: typically 30% on dividends, interest, and royalties.

When planning your tax strategy, it's important to consider exemptions, double taxation treaties, and other factors. If you have questions about taxation in the U.S., our team of lawyers and tax consultants is ready to assist!