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US income tax 101 for nurses

The income tax system works differently in the US compared to the Philippines. Whereas, a nurse's salary in Manila will only be deducted with a single income tax based on his or her salary bracket (or based how much the person earns annually), their US counterparts, on the other hand, may be charged a Federal income tax (US Federal governement), a State income tax (state level) and, possibly, a local income tax (county or city level).

The Federal income tax ranges from 15% to 35%. Florida, Texas and Washington charge the maximum 35%, however theses states no not have state income taxes. State income taxes range from 3% to 9.5%. The lowest state income tax is in Illinois, which has a flat rate of 3%. Vermont has the highest as it uses the maximum 9.5%. In California, state income tax ranges from 1% at $6,622 in income and increases to 9.3% over $43,468. Nurses whose basic pay exceeds the minimum for the highest bracket are usually in the 9.3% income tax category. Aside from the income tax, California has introduced a mental health tax of 1% for incomes above $1,000,000.

The US government also allows some local governments to impose their own taxes on personal income. An example is New York city which charges an additional 3.68% as city income tax on top of state and federal taxes.

Aside from income tax, there are other salary deductions that you might be subjected to when you start working in the US. There's the Federal Insurance Contributions Act (FICA), which is similar to the Philippines' Social Security System (SSS) or Government Service Insurance System (GSIS). There is also an old age insurance and health insurance component in the FICA, similar to our SSS pension and Philhealth.

To start your own research into the US income tax system, here's a useful article from Wikipedia. Here's also a comprehensive listing of US States and their income tax rates from Salary.com

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