There are five broad types of taxes in the US: taxes on what you earn, on what you buy, on what you own, on wealth you transfer, and on business income. Inside those five families sit dozens of specific levies imposed by federal, state, and local governments, each with its own rates and rules. The figures below reflect 2026 amounts where the IRS or other agencies have published them.
Taxes on What You Earn
The federal income tax is the largest single tax most people pay. It runs on a progressive structure, so income is taxed in layers. For 2026, a single filer pays 10 percent on the first $12,400 of taxable income and moves through six more brackets up to 37 percent on income above $640,600. Married couples filing jointly reach the 37 percent bracket at $768,700.1Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026 Employers withhold from each paycheck, and you settle up when you file Form 1040.
Payroll Taxes (FICA)
Every paycheck also carries Social Security and Medicare withholding under the Federal Insurance Contributions Act. You pay 6.2 percent for Social Security and 1.45 percent for Medicare, and your employer matches both.2Office of the Law Revision Counsel. 26 USC 3101 – Rate of Tax The Social Security portion applies only to wages up to $184,500 in 2026; earnings above that cap are exempt from the 6.2 percent.3Social Security Administration. Contribution and Benefit Base Medicare has no wage cap. High earners owe an extra 0.9 percent Medicare surtax on wages above $200,000 (single) or $250,000 (married filing jointly).4Internal Revenue Service. Questions and Answers for the Additional Medicare Tax
Self-Employment Tax
When you work for yourself, no employer is covering the other half of FICA. You pay the full 12.4 percent for Social Security plus 2.9 percent for Medicare on net self-employment income, a combined 15.3 percent.5Internal Revenue Service. Topic No. 554, Self-Employment Tax The filing requirement starts at $400 of net earnings.6Internal Revenue Service. Self-Employment Tax (Social Security and Medicare Taxes) You can deduct half of the self-employment tax when calculating adjusted gross income, which softens the income tax side.
Capital Gains and Investment Taxes
Profit from selling stocks, real estate, or other assets held longer than a year gets taxed at long-term capital gains rates rather than ordinary rates. For 2026, a single filer pays 0 percent on gains up to $49,450 of taxable income, 15 percent between $49,450 and $545,500, and 20 percent above that.7Internal Revenue Service. Topic No. 409, Capital Gains and Losses Assets held a year or less are taxed as ordinary income, which can run as high as 37 percent. Qualified dividends receive the same preferential treatment as long-term gains.
On top of that, higher-income investors owe the 3.8 percent Net Investment Income Tax on the lesser of net investment income or the amount by which modified adjusted gross income exceeds $200,000 (single) or $250,000 (married filing jointly).8Internal Revenue Service. Net Investment Income Tax It covers interest, dividends, capital gains, rental income, and royalties, and it stacks on whatever other rate already applies.
State Income Taxes
Most states impose their own income tax alongside the federal one. Nine states charge none at all: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. Where a state does tax income, rates range from flat structures near 2.5 percent to progressive systems that top out above 13 percent for very high earners. Location can add several percentage points to your effective rate.
Taxes on What You Buy
Sales and Use Tax
Sales tax is added at the register and set by state and local governments, not the federal government. Combined rates typically fall between zero and about 10 percent. Five states impose no statewide sales tax, though localities in some of those states may still charge one. Most states exempt groceries or prescription drugs, but the specific exemptions vary widely.
Use tax is the mirror image. When you buy from an online or out-of-state seller that doesn’t collect your state’s sales tax, you owe the equivalent amount directly to your state. Almost every state with a sales tax has a use tax at the identical rate. Compliance is low, but the obligation is legally enforceable.
Excise Taxes
Excise taxes hit specific goods rather than purchases generally. The federal gasoline excise tax is 18.3 cents per gallon, plus 0.1 cent earmarked for the Leaking Underground Storage Tank Trust Fund, for a combined federal rate of 18.4 cents per gallon.9Office of the Law Revision Counsel. 26 USC 4081 – Imposition of Tax States stack their own fuel taxes on top. Federal excise taxes also apply to alcohol, tobacco, airline tickets, and certain heavy vehicles. Some are a fixed dollar amount per unit; others are a percentage of value.
Customs Duties
Goods brought into the United States are subject to customs duties based on product type, country of origin, and applicable trade agreements. Rates range from zero on many raw materials to double-digit percentages on some manufactured goods. Shipments valued under $800 used to enter duty-free under the de minimis exemption, but the federal government eliminated that threshold in August 2025, so virtually every imported shipment now faces some duty assessment. Charges on overseas orders may show up separately at delivery.
Taxes on What You Own
Real Property Taxes
Property tax funds most of local government. Counties and municipalities tax real estate based on assessed value, and the revenue supports schools, fire departments, and roads. A local assessor determines what your home or land is worth, and the jurisdiction applies a millage rate to produce your annual bill. Effective rates across the country generally fall between about 0.5 percent and 2.5 percent of market value, with heavy variation by location. If you have a mortgage, your lender usually collects the tax monthly through escrow and pays it for you.
Personal Property Taxes
Many jurisdictions also tax movable assets — cars, boats, and business equipment. The most common form is the annual vehicle registration tax, which may be a flat fee, a percentage of current value, or a combination. Amounts tend to be much smaller than real property taxes, but they add up for anyone with multiple vehicles or expensive commercial equipment. Not every state levies personal property tax, and exemption thresholds differ.
Taxes on Wealth Transfers
Estate Tax
When someone dies, the federal government taxes their estate before the remaining assets pass to heirs. For 2026, estates valued at $15,000,000 or less are fully exempt under the increased basic exclusion amount enacted by the One, Big, Beautiful Bill signed in July 2025.10Internal Revenue Service. What’s New – Estate and Gift Tax Amounts above that face a top rate of 40 percent.11Office of the Law Revision Counsel. 26 USC 2001 – Imposition and Rate of Tax Because of the $15 million exemption, fewer than one percent of estates owe any federal estate tax.
Gift Tax
The gift tax keeps people from giving away wealth during life to sidestep the estate tax. For 2026, you can give up to $19,000 per recipient per year with no reporting or tax owed.12Internal Revenue Service. Rev. Proc. 2025-32 Married couples can combine exclusions for $38,000 per recipient. Gifts above the annual exclusion get reported on Form 709 and count against your $15 million lifetime exemption, which is shared with the estate tax.13Office of the Law Revision Counsel. 26 USC 2501 – Imposition of Tax No tax is actually owed until cumulative lifetime gifts above the annual exclusion cross that $15 million line.
Generation-Skipping Transfer Tax
A third transfer tax closes a loophole that would otherwise let wealthy families skip a generation of estate tax by leaving assets straight to grandchildren. The generation-skipping transfer tax applies at a flat 40 percent on qualifying transfers, with its own $15,000,000 exemption for 2026 matching the estate tax exclusion.12Internal Revenue Service. Rev. Proc. 2025-32 In practice it reaches only very large estates doing multigenerational planning.
State Inheritance and Estate Taxes
Some states impose their own inheritance or estate taxes, sometimes with much lower exemption thresholds than the federal level. Under an inheritance tax, the person receiving the assets pays rather than the estate, and the rate often depends on the recipient’s relationship to the deceased. A surviving spouse is usually exempt; distant relatives or unrelated beneficiaries may face higher rates.
Taxes on Business Income
Corporate Income Tax
C-corporations pay a flat 21 percent federal tax on net profits after deducting business expenses like payroll, rent, and supplies.14Office of the Law Revision Counsel. 26 USC 11 – Tax Imposed The corporation files Form 1120 each year. This is the source of the “double taxation” problem: the corporation pays 21 percent on profits, and shareholders pay capital gains or dividend tax when profits are distributed. S-corporations and partnerships avoid this by passing income through to owners’ personal returns, though the business itself may still owe state-level entity taxes or minimum franchise fees.
Employer Payroll Taxes
Businesses with employees owe the employer half of FICA (6.2 percent Social Security and 1.45 percent Medicare, matching what’s withheld). They also owe federal unemployment tax under FUTA at a base rate of 6.0 percent on the first $7,000 of each employee’s wages. Employers who pay their state unemployment taxes on time get a credit of up to 5.4 percent, bringing the effective FUTA rate to 0.6 percent, or $42 per employee per year.15U.S. Department of Labor. Unemployment Insurance Tax Topic State unemployment rates vary by industry and the employer’s layoff history.
Franchise Taxes and Entity Fees
Many states charge a franchise tax for the privilege of being organized or doing business there. The calculation method varies: some states use authorized shares, some use capital, and some charge a flat minimum fee. These apply whether or not the business turned a profit, and they sit alongside any state income tax on business earnings.
Avoidance Is Legal; Evasion Is Not
One boundary is worth keeping straight as you catalog these taxes. Tax avoidance, using deductions, credits, and retirement accounts to reduce what you owe, is legal and built into the code. Tax evasion, deliberately hiding income or lying on a return, is a federal felony punishable by up to five years in prison and fines up to $100,000 for individuals or $500,000 for corporations.16Office of the Law Revision Counsel. 26 USC 7201 – Attempt to Evade or Defeat Tax The IRS also charges interest and penalties on unpaid balances.17Internal Revenue Service. Failure to Pay Penalty