This guide explains US taxes in simple language, including who must file, which forms are used, and common mistakes to avoid in 2026.

What Are Taxes in the USA?

Taxes are mandatory payments to the government used for:

Infrastructure & public services

Healthcare & social programs

Education & defense

In the USA, taxes are mainly collected by the federal government and state governments.

Who Needs to File Taxes in the USA?

You may need to file a tax return if you:

Earn income in the USA (job, internship, freelancing)

Are an international student with on-campus work

Receive scholarships or stipends (taxable part)

Have a Social Security Number (SSN) or ITIN

⚠️ Even if no tax is owed, filing may still be required.

Types of Taxes in the USA

1️⃣ Federal Income Tax

Collected by the federal government on your income.

2️⃣ State Income Tax

Some states charge income tax; some do not.

3️⃣ Payroll Taxes

Automatically deducted from salary (Social Security & Medicare).

4️⃣ Sales Tax

Added when you buy goods or services (varies by state).

Important Tax IDs: SSN vs ITIN

SSN (Social Security Number)

Issued to people authorized to work

Used for employment & taxes

ITIN (Individual Taxpayer Identification Number)

Issued for tax purposes only

Used by non-residents without SSN

Does not authorize work

Many international students use ITIN to file taxes legally.

Common Tax Forms You Should Know

W-2: For employees (salary income)

1099: For freelancers/contractors

1040 / 1040-NR: Main tax return forms

1098-T: Education-related form (students)

Keep these documents safe every year.

When Is Tax Filing Deadline?

📅 April 15 (usually)

If April 15 falls on a holiday/weekend, the deadline may shift.

Late filing can cause:

Penalties

Interest charges

Legal issues

How to File Taxes in the USA

You can file:

Online using tax software

Through a certified tax professional

With free programs (if eligible)

Basic steps:

Collect income documents

Choose correct tax form

Calculate income & deductions

Submit return before deadline

Tax Refund: What Is It?

A tax refund happens when:

You paid more tax than required

The government returns the extra amount

Refunds are usually received within:

2–4 weeks (online filing)

Longer for paper filing

Common Tax Mistakes to Avoid

❌ Not filing at all

❌ Using wrong tax form

❌ Missing deadlines

❌ Ignoring state taxes

❌ Filing incorrect income details

Avoiding these mistakes saves money and stress.

Do Taxes Affect Credit Score?

Directly ❌ No

Indirectly ✅ Yes

Unpaid taxes or penalties can:

Lead to collections

Create financial issues

Affect future loans & visas

Always stay tax-compliant.

Final Thoughts

Understanding US taxes is essential for:

Students

Immigrants

Freelancers

New residents

Filing taxes correctly keeps you legal, stress-free, and financially safe in the USA.