They say the only certainties in life are death and taxes—and with good reason. From federal levies to local assessments, Americans encounter a variety of taxes each year. In this guide, we’ll explore the most common—and a few of the least common—taxes you might face in the United States.
1. Income Taxes
The U.S. federal income tax is progressive, meaning your tax rate increases as your income grows. Workers pay these taxes on earnings from their jobs, and the revenue supports numerous national programs and services, including:
- Medical and scientific research
- Education
- Transportation infrastructure
- Veterans’ and federal retirees’ benefits
- Interest on national debt
- Social safety-net programs (e.g., CHIP, Medicaid, Medicare)
- Social Security
- National defense and international security assistance
2. Corporate Income Taxes
Corporations pay taxes on their profits—revenues minus business expenses. For example, C corporations remit federal corporate income taxes. Though the statutory rate was reduced to 21% in 2017, these taxes still indirectly affect employees (through potentially lower wages) and consumers (through higher prices).
3. Property Taxes
Local governments levy “ad valorem” taxes—based on property value—on real estate and certain personal property. Homeowners and real-estate investors rely on these taxes, which fund:
- Public schools
- Police and fire departments
- Libraries
- Water and sewer services
- Roads and public works
Both immovable assets (land, buildings) and movable assets (vehicles, boats, collectibles) can be taxed, depending on your jurisdiction.
4. Sales Taxes
Sales taxes apply to most purchases of goods and services. Retailers collect state, county, and city sales taxes at the point of sale and remit them to the government. Note that Oregon, New Hampshire, Montana, Delaware, and Alaska have no state sales tax.
5. Estate Taxes
Only estates valued above $13.99 million owe federal estate taxes; surviving spouses are exempt. For example, an estate worth $15.7 million would incur taxes only on $1.71 million—the amount exceeding the exclusion threshold.
6. Inheritance Taxes
Distinct from estate taxes, inheritance taxes are paid by beneficiaries on assets they receive. This is a state, not federal, tax, and currently only six states impose it: Pennsylvania, New Jersey, Nebraska, Maryland, Kentucky, and Iowa.
7. Tariffs
Tariffs are taxes on imported goods and services, designed to encourage domestic purchasing by making foreign products more expensive. They’re often the subject of political debate over their economic effectiveness.
8. Payroll Taxes
With each paycheck, employees see deductions for Social Security and Medicare. Employers match these contributions dollar for dollar and remit the total to the federal government. Self-employed individuals pay both shares as the “self-employment tax.”
9. Capital Gains Taxes
When you sell a capital asset—stocks, bonds, jewelry, or collectibles—you pay capital gains tax on the profit. Rates vary based on how long you held the asset: short-term gains are generally taxed at higher rates than long-term gains. For example, Nevada residents with capital gains of up to $48,350 in 2025 pay no state tax; gains between $48,351 and $533,400 face a 15% rate, and gains above $533,400 are taxed at 20%.
10. Excise Taxes
Excise taxes are applied to specific goods and services at purchase—like gasoline, airline tickets, or tobacco. These can be levied by federal, state, or local governments. Businesses selling excisable items collect the tax and forward it to the appropriate authorities, often passing the cost onto consumers.
Understanding these taxes—and how they fund essential services—can make tax season a little less intimidating. While no one eagerly anticipates filing their return, knowing what you owe and why can empower you to plan and budget more effectively.
