Texas Income Tax Calculator 2026

Income tax for Texas residents is federal only

Texas residents do not file a state income tax return. The state has no personal income tax. Your income tax for 2026 is the federal Form 1040, due April 15, 2027.

That covers every type of income: wages, self-employment profit, interest, dividends, capital gains, rental income, pensions and Social Security are all untaxed by the state.

2026 federal tax on common Texas incomes

Wages only and the standard deduction. These are full income tax bills for a Texas resident.

Property tax and sales tax: where Texas collects instead

Texas funds schools and local government mainly through property taxes, which are among the highest in the country, and a 6.25% state sales tax with up to 2% local tax (8.20% average combined). For homeowners, property tax can easily exceed what a modest state income tax would cost elsewhere.

Both are deductible on your federal return if you itemize. Texas residents can deduct sales tax instead of income tax, add property tax, and claim up to a combined $40,400 of state and local taxes for 2026. With the higher SALT cap, a Texas homeowner with a large property tax bill is more likely to come out ahead by itemizing than under the old $10,000 limit.

Self-employed Texans

Self-employed Texans pay no state tax on business profit, but federal self-employment tax applies: 15.3% (12.4% Social Security up to $184,500 plus 2.9% Medicare) on 92.35% of net earnings. Half of it is deductible. Because nothing is withheld, make federal estimated payments on Form 1040-ES each quarter to avoid underpayment penalties.

Avoiding an underpayment penalty

With no state return, Texans only have to get one tax right, but the federal underpayment rules still apply. You generally avoid a penalty if withholding and estimated payments cover at least 90% of this year’s tax or 100% of last year’s tax (110% if last year’s AGI was over $150,000, or $75,000 married filing separately), or if you owe less than $1,000 after withholding.

Common triggers in Texas are side income from gig work or rental property, large capital gains, and two-income households where each job withholds as if it were the only one. A quick check: compare your year-to-date federal withholding on your last pay stub with the estimate from our calculator, and raise line 4(c) of your W-4 if you are behind.

Moving to Texas

Moving to Texas does not end your tax obligations in your former state for that year. You file a part-year resident return there for income earned while you lived in it, and some states tax deferred compensation or bonuses earned while you were a resident even if paid after you leave. Keep proof of your move date (lease, closing documents, driver’s license and voter registration change).

If you work remotely for an employer in another state, your wages are generally taxed where you physically work, which is Texas. A small number of states apply a “convenience of the employer” rule to remote workers, so check your employer’s state.