Taxes in the US

Last updated: March 5, 2026

Taxes in the US: A Practical Guide for Dutch Emigrants

Moving to the United States involves adjusting to a new tax system that differs significantly from the Dutch model. Understanding the US tax obligations is essential to avoid penalties and optimize your financial planning. This guide covers the basics of federal and state taxes, filing requirements, key procedures, and practical tips.

Overview of the US Tax System

The US tax system operates at multiple levels:

Federal Taxes: Collected by the Internal Revenue Service (IRS)
State Taxes: Vary by state; some states have income tax, others do not
Local Taxes: Some cities and counties impose additional taxes

As a resident or worker in the US, you will likely be subject to federal income tax and possibly state and local taxes.

Residency for Tax Purposes

Your tax obligation depends on your residency status:

Resident Alien: Generally taxed on worldwide income, similar to US citizens.
Nonresident Alien: Taxed only on US-sourced income.

The IRS uses the Green Card Test and the Substantial Presence Test to determine your status. Check your status with the IRS tool or consult a tax advisor.

Federal Income Tax

Tax Rates

The US federal income tax is progressive, with rates ranging from 10% to 37% (2024 brackets):

Taxable Income (Single Filer)	Tax Rate
Up to $11,000	10%
$11,001 – $44,725	12%
$44,726 – $95,375	22%
$95,376 – $182,100	24%
$182,101 – $231,250	32%
$231,251 – $578,125	35%
Over $578,125	37%

Note: Rates vary for married couples filing jointly and heads of household.

Filing Requirements

When to File: Annually by April 15 (extensions possible).
How to File: Electronically via IRS e-file or paper forms.
Forms: Most individuals use Form 1040.
Social Security Number (SSN): Needed to file taxes. If you do not have an SSN, apply for an Individual Taxpayer Identification Number (ITIN).

Deductions and Credits

Standard Deduction: For 2024, $13,850 for single filers.
Itemized Deductions: Mortgage interest, state and local taxes (capped at $10,000), charitable donations, medical expenses (above 7.5% of income).
Tax Credits: Child tax credit, earned income tax credit, education credits.

State and Local Taxes

State Income Tax

Varies Widely: 7 states have no income tax (e.g., Florida, Texas).
Rates: Range from 0% to around 13.3% (California’s top marginal rate).
Filing: Separate from federal tax return; deadlines vary.

Sales Tax

Applied to Purchases: Typically 4-10%, varies by state and locality.
Not Refunded: Unlike VAT in the Netherlands, sales tax is generally not refundable.

Property Tax

If you buy property, expect annual property taxes based on assessed value. Rates vary by state and county.

Social Security and Medicare Taxes

If you work in the US, your employer withholds Social Security (6.2%) and Medicare (1.45%) taxes from your paycheck. Self-employed individuals pay both employer and employee portions (total 15.3%) via self-employment tax.

Tax Treaties and Double Taxation

The Netherlands and the US have a tax treaty to prevent double taxation. Key points:

Foreign Tax Credit: You can often credit US taxes paid against Dutch taxes owed on the same income.
Reporting: You must report worldwide income to both countries if considered resident for tax purposes.

Consult the IRS website and the Dutch Belastingdienst for treaty details.

Practical Steps for Dutch Emigrants

Obtain an SSN or ITIN immediately upon arrival.
Keep detailed records of all income sources, including Dutch income.
Track your number of days in the US to determine residency status.
File on time to avoid penalties; consider professional tax help.
Understand your state’s tax rules, as they can be very different.
Use IRS Free File or authorized tax software for simple returns (irs.gov/freefile).

Common Mistakes

Not filing a US tax return when required. Even nonresidents with US income must file.
Ignoring state tax obligations. Each state has different rules and deadlines.
Failing to report worldwide income if classified as a resident alien.
Missing deadlines or underpaying estimated taxes, resulting in penalties.
Neglecting to apply for an ITIN if you are not eligible for an SSN.
Not considering the tax treaty benefits to avoid double taxation.
Confusing sales tax with VAT. No refund on sales tax purchases.
Overlooking self-employment tax if working as a freelancer or contractor.

Useful Official Resources

IRS main site: https://www.irs.gov
IRS forms and instructions: https://www.irs.gov/forms-pubs
State tax websites: Check your specific state’s Department of Revenue website.
US-Netherlands tax treaty details: IRS Tax Treaty Documents
Dutch Belastingdienst: https://www.belastingdienst.nl

Understanding US taxes is complex but manageable with preparation. Start early, keep organized records, and seek professional advice if necessary to comply with all requirements efficiently.