Texas Income Tax Calculator 2025
🎉 Texas State Tax Quick Facts (2025)
- State Income Tax: NONE - $0!
- Tax Rates: 0% on all income
- Tax Brackets: None needed!
- State Tax Return: Not required
- Status: One of 9 no-income-tax states
Texas Has NO State Income Tax
You read that right. Texas does not tax personal income. Whether you make $30,000 or $3,000,000, you pay $0 in state income tax.
This makes Texas one of the most attractive states for:
- Remote workers from high-tax states (California, New York, etc.)
- Retirees looking to stretch their savings
- Small business owners and self-employed professionals
- Anyone tired of complex state tax filings
How Much Will You Actually Save?
Real Savings Examples: Moving to Texas
Scenario 1: $75,000 Salary (Middle-Class)
| From State | Old State Tax | Texas Tax | Annual Savings |
|---|---|---|---|
| California | ~$4,200 | $0 | Save $4,200 |
| New York State | ~$4,000 | $0 | Save $4,000 |
| New York City | ~$6,300 | $0 | Save $6,300 |
| Illinois | ~$3,675 | $0 | Save $3,675 |
| Massachusetts | ~$3,750 | $0 | Save $3,750 |
Scenario 2: $150,000 Salary (High Earner)
| From State | Old State Tax | Texas Tax | Annual Savings |
|---|---|---|---|
| California | ~$12,800 | $0 | Save $12,800 |
| New York City | ~$14,500 | $0 | Save $14,500 |
| New Jersey | ~$9,300 | $0 | Save $9,300 |
Over 10 years at $75k: Save $40,000-$60,000 depending on where you move from!
But Wait... What About Other Taxes?
Texas doesn't have income tax, but the state still needs revenue. Here's what you will pay:
1. Property Taxes (The Big One)
Texas has high property taxes - some of the highest in the nation.
- Average rate: 1.6% to 1.8% of home value annually
- Some areas: Over 2% (especially suburbs with good schools)
- Example: $300,000 home = $5,000-$6,000/year in property tax
Why so high? Texas funds schools, roads, and local services through property taxes instead of income tax.
Property Tax Impact on Savings
If you're renting, you win big - you avoid property taxes entirely and keep the full income tax savings.
If you're buying a home, factor in property taxes. Your net savings will be smaller but still positive for most people.
Example: $75k earner moving from California
- Save $4,200/year on income tax ✅
- Pay $5,500/year in TX property tax on $300k home
- Would have paid $3,000/year in CA property tax (1% rate)
- Net change: Save $1,700/year (still a win!)
2. Sales Tax
Texas sales tax is 6.25% (state) + up to 2% (local) = 6.25% to 8.25% total.
This is higher than many states. You'll notice it on everyday purchases, dining out, and shopping. Most groceries are exempt (but not prepared food).
Impact: If you spend $20,000/year on taxable goods, you'll pay ~$1,400 in sales tax.
3. Other Taxes
- Franchise Tax (business only): Small businesses under $1.23M revenue are exempt. Not personal.
- No estate tax (state-level) - another win for retirees and high net worth individuals
- No tax on retirement income - pensions, Social Security, 401(k) withdrawals all tax-free at state level
The Full Cost-of-Living Picture
$75,000 Earner: California vs Texas (Real Math)
| Category | San Francisco | Austin, TX | Houston, TX | San Antonio, TX |
|---|---|---|---|---|
| State Income Tax | -$4,200 | $0 | $0 | $0 |
| Rent (1BR) | -$3,000/mo | -$1,600/mo | -$1,200/mo | -$1,000/mo |
| Annual Rent | -$36,000 | -$19,200 | -$14,400 | -$12,000 |
| Combined Savings | — | $21,000/yr | $25,800/yr | $28,200/yr |
Key Insight: The combination of no income tax + lower rent is where Texas really wins. Austin is now expensive, but Houston and San Antonio still offer great value.
Should You Move to Texas?
✅ Texas is a Great Move If:
- You make $60k+ and can work remotely (bigger income = bigger savings)
- You're moving from a high-tax state (CA, NY, NJ, MA, IL)
- You're okay with hot summers (100°F+ is common June-August)
- You want to buy a home and build equity (housing is more affordable than coastal cities)
- You like driving (Texas is car-dependent; public transit is limited)
- You're self-employed or have a side business (no state tax on business income either!)
❌ Maybe Think Twice If:
- You make under $50k (income tax savings would only be $1,500-$2,500/year - may not justify the move)
- You'd lose a high-paying job that requires in-office work
- You rely heavily on public transit (only Austin and Dallas have limited rail; you'll need a car)
- You hate driving (everything is spread out, 30-45 min commutes are normal)
- You need specific climate/culture (TX is hot, conservative, and suburban outside cities)
Best Texas Cities for Middle-Class Remote Workers
If you're moving to Texas, here's where you get the most bang for your buck:
-
San Antonio
- Cheapest major city in TX ($1,000-$1,300 for 1BR)
- Growing tech scene
- Good food, diverse culture
- Less traffic than Austin/Houston
-
Fort Worth
- More affordable than Dallas ($1,200-$1,500 for 1BR)
- Access to DFW job market
- Family-friendly suburbs
-
Houston (suburbs)
- Huge job market (energy, medical, tech)
- Most diverse city in the U.S.
- Excellent food scene
- Avoid downtown (expensive); go for Katy, Sugar Land, The Woodlands
-
Austin (if budget allows)
- Now expensive ($1,600-$2,000 for 1BR)
- Best for tech workers, music lovers
- Great food, outdoors, culture
- Consider suburbs: Round Rock, Cedar Park (cheaper)
Tax Filing Simplified
Since Texas has no income tax, you only file a federal return. This is huge for simplifying your taxes.
Best Low-Cost Federal Tax Software (2025)
-
Cash App Taxes - FREE
Completely free for federal filing. Since you have no state return in Texas, you're done in 20 minutes. Best deal.
-
FreeTaxUSA - FREE federal
Clean interface, good for slightly more complex returns (rental income, investments).
-
IRS Free File - FREE (income under $79k)
Direct from the IRS. Works fine if your taxes are straightforward.
Skip: You don't need to pay $89+ for TurboTax when you only have a federal return.
Finding Affordable Tax Help in Texas
- VITA (Volunteer Income Tax Assistance): FREE for income under $64,000. Available at libraries statewide.
- Local Enrolled Agent (EA): $100-$250 for simple federal return (no state needed). Search "enrolled agent" + your city.
- H&R Block / Jackson Hewitt: Last resort. They'll charge $150-$300 for a simple return you could do yourself.
Staying Tax-Compliant After Moving
When you move to Texas, follow these steps to establish residency and avoid issues with your old state:
- Get a Texas driver's license within 90 days of moving
- Register your car in Texas
- Register to vote in Texas
- Update your address with banks, employer, IRS
- File a part-year return with your old state for the portion of the year you lived there
Warning: Some states (like California) aggressively audit people who move. Keep evidence of your move: lease, utility bills, moving receipts, etc.
Other States with No Income Tax
Texas isn't the only option. If you want zero income tax but Texas isn't your style, consider:
- Florida - No income tax, beach lifestyle, no winter. Property taxes are lower than TX. Great for retirees.
- Tennessee - No income tax, lower cost of living than TX, four seasons. Good for families.
- Nevada - No income tax, dry climate, outdoor recreation. Reno is affordable; avoid Vegas unless you love it.
- Washington - No income tax, beautiful nature, tech jobs in Seattle. But: high sales tax (10%+), expensive housing, rain.
See our full guide: 9 States with No Income Tax (2025)
Common Questions
Will Texas add an income tax in the future?
Very unlikely. The Texas Constitution prohibits state income tax without voter approval. Given Texas politics and strong anti-tax culture, it's not happening anytime soon. Even if proposed, voters would likely reject it overwhelmingly.
Do I have to pay federal taxes in Texas?
Yes. Texas has no state income tax, but you still pay federal income tax to the IRS (same as every U.S. state).
Are there any cities in Texas with local income tax?
No. No city or county in Texas can impose a local income tax. You're safe everywhere in the state.
What if I work remotely for a company in another state?
As a Texas resident, you pay zero state income tax regardless of where your employer is located. However, a few states (like NY, CA) might try to tax you if you occasionally work there - consult a tax pro if you travel for work frequently.
The Bottom Line
Texas offers real, substantial tax savings for most earners, especially middle and high-income individuals. Yes, property taxes and sales taxes are higher, but for most people, the math still works out in Texas' favor - especially if you're renting or moving from an expensive state.
Best for: Remote workers, retirees, small business owners, and anyone making $60k+ who can handle the heat and car culture.
Run the numbers for your situation - but for most people, Texas is a financial win.
Compare TX with other states: CA vs TX | IL vs TX
State rankings: Lowest Tax States 2025 | Best States for Retirees | States with No Income Tax | Highest Tax States 2025