In general, in the United States tax is due at federal, states and sometimes local levels.
For instance, if you live in New-York city, you have to pay the federal tax, the tax of the state of New-York and the tax of the city of New-York.
The tax burden varies significantly between states: some states do not levy taxes on personal income or corporate profits like in Texas, while others have a fairly heavy taxation like in New York. Conversely, some taxes are exclusively levied at a local level like the Sales and Use tax. For taxes in DC: http://otr.cfo.dc.gov/otr/site/default.asp. As a consequence, there is no VAT per se in the United States.

It is also important to determine your tax status in the country. A tax resident is taxed on his income as any U.S. citizen. You are considered as a tax resident by the U.S. administration if:

* You hold a green card;
* You have lived in the United States for more than 183 days;
* You have lived in the United States for more than 30 days during the last calendar year and at least 183 days during the current year and the previous last two years.

In general, income tax is deducted at source on the salary and an annual tax return form must be filed at the end of the fiscal year. The http://www.irs.gov/ is responsible for monitoring taxes and performs audits to assure that tax returns are being appropriately paid. FAQ about taxes as a non-resident are addressed here: http://www.irs.gov/faqs/faq13-4.html.

As far as cost of living in DC, it is fairly high for the USA. Here is a helpful article on pros & cons of the area: http://dc.about.com/od/communities/a/LivinginDC.htm. There is also a handy cost of living calculator on Easy expat http://www.easyexpat.com/en/mod/cost.htm.

Best of luck!

 

Hi thomas, texkourgan sure gave us all some great info! Kudos to her and Easyexpat for having this site. while i was searching through the info i found this site to be especially helpful.. http://bit.ly/ExpatTaxReturn

all the best,
James