US personal income tax is something permanent residents need to understand, since they are obligated to file and pay taxes as required. The tax system differs from Vietnam’s, so it can feel unfamiliar. This article explains US personal income tax through its basic principles so you can grasp them.
US personal income tax for permanent residents
US permanent residents are generally treated as tax residents, meaning they are obligated to report worldwide income (both inside and outside the US), similar to citizens. This is an important point to know.
There are mechanisms to avoid double taxation on income already taxed in another country, but the reporting obligation still applies. So understanding your tax obligations is necessary from the outset.
A progressive tax system
Federal income tax works on a progressive basis: the higher your income, the higher the tax rate applied to the portion above each threshold. Besides federal tax, some states have their own income tax, while others do not.
So your total tax depends on your income and the state you live in. Understanding this mechanism helps you estimate your tax burden and plan your finances.
Filing and payment obligations
People with income usually have to file taxes annually by the required deadline. Employers typically withhold part of the tax from wages, and the year-end tax filing settles any amount still owed or overpaid.
You should refer to information for taxpayers and tax regulations for residents on the tax agency’s website to understand your obligations.
Summary
US personal income tax applies to permanent residents on worldwide income, on a progressive basis, with state tax in some places. Employers withhold tax from wages, and an annual filing settles the final amount. You should understand your tax obligations from the start and consult official sources.
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References
- Internal Revenue Service — Taxpayer Information: https://www.irs.gov/individuals
- IRS — Taxation of Resident Aliens: https://www.irs.gov/individuals/international-taxpayers/taxation-of-resident-aliens
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