Texas Tax FAQ

No. Texas does not levy a personal income tax in 2026 — and the Texas Constitution requires statewide voter approval to enact one. This applies to wages, self-employment income, capital gains, and most retirement distributions.

A single filer in Texas with no pre-tax contributions takes home roughly $77,500 on $100,000 gross in 2026. Married filing jointly typically lands closer to $84,800 due to the larger standard deduction and wider brackets. Use our calculator for personalized math.

There's no statewide rate — property tax is levied by counties, school districts, cities, and special districts. Effective combined rates run from about 1.6% to 2.3% in major metros. Expect ~$10,000–$14,000 a year on a $600,000 home in Austin or Dallas.

6.25% state, plus up to 2% local — combined caps at 8.25% in most major cities (Austin, Dallas, Houston, San Antonio). Groceries, prescription drugs, and most healthcare are exempt.

On retirement income, no — Texas doesn't tax 401(k), IRA, pension, or Social Security distributions. Federal rules still apply. Property tax remains a major cost factor; Texas does offer significant homestead and over-65 exemptions that reduce the bill.

Generally yes. The income-tax savings vs CA, NY, OR are substantial; capital gains are not taxed at the state level; and the 'no income tax' premium tends to compound for high earners over time. The trade-off is property tax and (in coastal areas) higher insurance.

Texas levies a franchise tax on businesses with revenue above ~$2.47M (2024 threshold). Most small businesses, sole proprietors, and freelancers don't owe anything. Larger entities owe 0.375% on retail/wholesale or 0.75% on other revenue, calculated on total revenue minus the largest of three deductions.

Texas has no estate tax and no inheritance tax. Federal estate tax still applies above the federal exemption (~$13.6M per person in 2024, projected higher in 2026 absent legislative changes).

No personal state income tax return is required. Some pass-through entities (LLCs, S-corps, partnerships) file a Texas franchise tax report annually — usually a 'no tax due' report below the threshold.

Federal return as usual, plus a part-year resident return for your old state covering wages and other income earned while you were a resident there. From your Texas move date forward, your income belongs to Texas (no state return required). See our Moving to Texas Tax Guide for the residency checklist.